RS Reliance Steel & Aluminum

Brenda Miyamoto Director of Investor Relations
Gregg Mollins President and Chief Executive Officer
Jim Hoffman Executive Vice President and Chief Operating Officer
Bill Sales Executive Vice President, Operations
Karla Lewis Senior Executive Vice President and Chief Financial Officer
Chris Terry Deutsche Bank
Martin Englert Jefferies
Novid Rassouli Cowen Inc
Phil Gibbs Keybanc Capital Markets
Aldo Mazzaferro Mazzaferro Research
Call transcript
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Greetings and welcome to the Reliance Steel & Aluminum Fourth Quarter and Full year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would not like to turn the conference over to your host, Brenda Miyamoto. you. Thank

begin. may You

Brenda Miyamoto

posted Gregg Good under call and and Gregg CFO; our from of but be the on update thanks our our now other company filed recording and on website forward-looking conference A this those materially These XXXX disclaims these the President include, Executive with which and be known information may Mollins, joined of duty I statement. and on reports actual limited Securities the not of December operator. today's the Karla COO; and and or the to Factors you of company any achievement Form the Commission. cause XXXX to that different only unknown our performance based of press will be the XX, a other on and forward-looking Hoffman, CEO the Lewis, information uncertainties release fourth to all contain Reliance. provided may are Vice Investor or President Operations. for which our our Risk for The this factors Executive full-year Senior involve by assumptions the on I'm results. Exchange joining call date and the turn results, therein expectations results, will risks, President disclosed caption of financial press XX-K implied the Sales, are call, our morning, of performance, at release over you, factors factors, under President other and speak call section President not and this Annual by company's to herein. and certain as to in The may to CEO; company's and and are subject which Vice the the control, and of Report quarter Mollins, year ended and Jim Thank Bill to number the statements Vice discuss Executive information call change

Gregg Mollins

thank fantastic XXXX Good Reliance. discuss and for to morning, quarter a results. was full-year you us everyone, today year financial our for joining and fourth

strong margin near range our in history our and of of profit $X.XX annual dollars Our high-end profit produced of gross of is to highest the XX.X% billion. XX% gross target the XX%, company's

XXXX Reliance. Continued XXXX modest grow the the along demand growth and the to reach highest to ever second for of over by billion, pricing with enabled net environment our most us positive $X.XX sales billion throughout $X.XX year

Our continues tons sold increased X.X% macro the that favorable in generally year. throughout improve XXXX, given a to environment

year, our in throughout overall Although metals compared average resulting the to fluctuated XXXX XXXX. pricing in was selling the positive X.X% in price environment increase

job value-added an capital. the field Our fluctuations, to and customers, controlling expenses growing services excellent did our managers in our pricing managing managing working

resulted $X.XX which our of share diluted by highest second annual per in surpassed All only XXXX. earnings of

benefit of amount Our are that Karla minute. tax in discuss the and per will the reform from share share $X.XX per $X.XX earnings impact a exclude non-GAAP

down associated tons were compared of to attributable shipping expectation third XXXX normal customer quarter typical line third to X.X% due X% with This holiday-related fourth quarter the the in quarter. decrease reduction closures. seasonality fewer our was days to from shipping sold in tons Our from resulting slowdown in to with in the volumes the of sold X%

X.X% of with demand up overall remained quarter shipments the However, compared our fourth strong XXXX. to

section are infrastructure product to nearly plans. markets level of marketplace, possible to continues XXX spring we see pressuring were investigation, level In characterized the demand benefit mix, contributed pending pricing. a the by which The of improve in months related summer activity. overall an high from We well and improvement with metal to in end from increasing sentiment the the as expect a of XXXX Reliance's we serve customer to upside all in heightened longer-term infrastructure to positioned imports further XXXX uncertainty incremental administration's

with in year raw supported increased the we material and environment, the of However, every levels the resolutions sell. half trade-faced pricing second demand higher nearly on improving along product pricing

As up a ahead quarter fourth to average our XXXX expectations result, of Xrd X%. of XXXX compared selling our the flat to was price X.X% quarter, down

increases October in from all stronger more were reflected that Our Xth our XXXX we have of have resulted average Since increases alloy. products, higher prices mill fourth and the our earnings. quarter including and a such, shipment steel carbon categories and as XXXX, commodity contributed announced levels year-over-year been results. On on these XXXX our there positive and selling continued them results not carbon, stainless, to quarter our impact were a up fully price aluminum for increases than first basis, than have price selling XX expect for into in anticipated quarter continuing both to price prices

or sheet, which comfortable we our our supports inventory balance often hours our Turning our delivery position, in are just-in-time provide less. to XX ability to customers, with to

one achieved of industry-leading inventory gross XXXX. the components crucial profit maintaining more these that to a always efficient main continue will regard Together, will enabled value-added facilities growth. believe of focus strategic For to we value-added processing, profit factors to be margin. our of our we gross rate management and year, drive investments key the line. us recent churn to capabilities. dropped generate an significantly Reliance, In that to make at pricing in we Other processing Inventory equipment the with drivers inventory levels include X.Xx as consistent is discipline organic dollars in bottom and years have

with $XXX related. million investments expenditure XXXX Our majority growth budget the of is capital these

earnings footprint, products our expect higher grow by or expand processing and drive acquiring continue of our our and capabilities. to increase run to value-added that also services compliment businesses well diversification We our existing

in in in XXXX. While market acquisition it are the early of increase year, in the is still number an we seeing the opportunities

cash the XXXX. million result engineered growth specialty is was As niche capital earnings. a perforated on has management the completed October player operating our operations highly million our working in support Ferguson spent of of flow been effective in $XXX.X To capital in XXXX. and profitability a accretive we Ferguson acquisition generated and increased from we and expenditures in expectations providing Company to Perforating our products and XXXX smarter with line in $XXX

of also dividends million repurchased our million to We $XXX in paid XXXX. $XX stock cash stockholders in and our

for by In $X dividends years consecutive share regular XXXX first for $X.XX dividend for addition regular quarterly per increased These the has confidence, management summary, our business activities we since demonstrates our our Board per an IPO. In of exceptional team outlook. the stockholder dividend return have effective in and for paid this to an and is was cash quarterly our XXth XX our of annual dividend our increase Reliance and Reliance. year XX.X% XXXX XXXX share. quarter model

that that are positive and in improved We XXXX. environment continued demand we by XXXX, saw momentum pricing into has the encouraged

higher allowed In overall metal ongoing to gross a we strong expect pricing. while exist of improve pricing, profitability the to uncertainty are pricing, infrastructure sentiment support will performance profit meaningful metal us the generate demand in our will enhance flows. the in and that and in to strong reduction increase higher customer addition spending and to metal earnings, continuing anticipate imports by will our we potential field, market as an our managers substantially margin which enabled higher believe cash well factors, We fantastic some the for as demand we believe these continue and still

returning We returned Over the have and over look $X $X.XX billion growth our dividends through acquisitions, repurchases. and to expenditures have we past capital on years, stockholder market Through stockholders. these five to Jim? our we the investments invested operations our to and hand even share further return and billion conditions. I to value forward further and call our continuing will greater from activities. comment now to Jim over strong

Jim Hoffman

Thanks morning, Gregg, and good everyone.

to I field off, folks work that to you strong operational results. would the thank hard year We contributed our for another First your dedication our XXXX performance. helped in of strong us and recognize achieve like who

well sell stainless our US operations into. service toll end which fourth then their and those products strong demand the our throughout steel outlook aluminum our automotive, will Demand our we for discuss products the remain and through of processing on markets. products Bill Mexico I'll in Now, carbon in key alloy we pricing markets, certain as address as related steel and quarter. in end mainly

equipment continue and make to facilities and to capacity We our to aluminum expand both carbon increase market. our to investments for automotive processing

Mexico in Our with continues been Monterrey, has year facility to expectations. full for in a perform and our now line operational

this shipbuilding, spending. operating coming Kentucky in and ramp location construction In for that the facility Demand increase complete from continue XXXX steel manufacturing, industry an includes we forward new second to quarter the of we addition, a at months. look in construction aluminum truck towers the Kentucky increased in demand XX% capacity to heavy XXXX to the In trailer, in transmission experience region. to of second in tank which low wind half processing large continuing expected improve and in began to in up XXXX. are of levels support and particular, manufacturers we capacity processing railcar, facility in of equipment approximately of and quarter both we fourth In the

XXXX. far throughout demand still market, steady Looking at ahead levels Demand we're to below continue including of the experienced in grew to quarter industry infrastructure heavy rate optimistic the construction in in first XXXX, peak but non-residential will strengthen. remains a XXXX,

first We fourth in cautiously domestic sell improve steadily this infrastructure existing oil natural continues -- the the federal that each in products role weather Demand the pushing to support as Extreme mainly in is to with energy the them our a which played conditions market optimistic, spending market, successive remain XXXX. we small delaying quarter are for increased in into improve. certain winter and infrastructure gas upside to gradually construction half continue well volume We also spending. improved incremental from of projects, into possible footprint end XXXX. positioned first will in quarter non-residential quarter East

extending to activity continue activity times drilling growth rig gaining mill the see We with lead counts strength. completion in and and

of The markets we the products recover. positioned believe as hitting increased anticipated market Which were our we support end contributed is in to sign, Importantly, our demand continues line is activity in energy for pricing in sell are XXXX. in expectations into stronger quarter No had was market we encouraging positively this energy quarter. stronger our an to the steel XXXX, than with to earnings in a after XXXX. businesses these bottom for carbon well we fourth growth the servicing every what

noted price average late in we the for steel the significant carbon we would our in fairly products call, we negatively our As our impact third on certain selling expected quarter. of experienced last price that fourth quarter reductions

a mentioned, increases announced quarter, carbon of were number of However, were had there the price products for throughout as supported. all Gregg which steel

portion margin a fourth increases pass the and receiving our pricing our customers level our maintain a announced to to the during able price prior improvement of quarter resulted for quarter. the in in inventory. gross were we profit into result, our steel before slight versus carbon products the cost a As along This higher

both help So are decision; activity higher far about alloy carbon it are And increases pricing supported. an demand in demand market and In in XXXX, XXXX to improvement forward. being we going increasing and confident offerings believe raw are price to market should that energy in to material as for for increased is products increases there in our there has outlook no continues the in the Price prices. with due room relates steel pending positive further been levels improving pricing for as import overall been trends. continued have recover. energy summary, XXX products reduction demand we further We support optimistic section

our for that and see industry are strength experiencing believe and now industry your committed as the remain We will Bill We we absorb in demand end increased hand on to cost support we markets. well energy, in Thank tolling markets for I these servicing further and residential to existing to attention in business, to for these steady businesses to strengthen. processing continued our over and comment equipment value-added heavy in call non are investing pleased positioned Bill? the are today. non-ferrous structure construction increases you our market footprint, markets. volumes to automotive the continue

Bill Sales

Jim. you, Good Thank morning everyone.

I'll orders to of Aluminum aluminum these quarter XX in led folks in expect demand remained to The I their steel sell products, for are weeks. our improve in industry a compared review well the operating times and excellent and done. into. XXXX, the for single-aisle by rates we Thank now X all strong in job field our we you performance To the fourth date, backlog commercial continue for stainless Aerospace demand in quarter. First, would lead to pricing aerospace planes. for to for also key trends including and like approximately plate strong at the planes steady thank XXXX. products the third is to markets bill

see continue many from of our to defense customers. We activity increased

all-metal this Our our our participation foreseeable outlook began growth. aerospace to that the fully share program production expected through fighter entry levels our operational $XXX the XXXX. into expect end as for forward market subsidiary and of positive demand is fairly in the services first quarter activity future. related aerospace our market in We India now to strike the by ramped remain the to is continues and the now look become overall increasing maintained joint of to Further, area our we market for in X-year million production steady in XXXX to

Korea higher remains global in needs. production XXXX US relates to are strong As market, in outlook an expanding We industry particularly our based positive maintain new of this the our capacity process in position for it market, from manufacturing semiconductor in semiconductor adding South the demand supports to on the we the global Pacific RIM Because operations US China outlook and to the in solid in activity and outlook and market the encouraging and trends of support strong. optimistic regions, a semiconductor growth and customers. our the

titanium to mills. products recent for market stainless products, products. effect heat-treated majority our for as on of heat-treated and has January sales by as Moving aerospace Demand the increases plate supported of aluminum to most took into aluminum specialty heat-treated price the The been aluminum the steel continued plate fully well consistent especially improve. in pricing, that have

Currently, we prices demand alloy extending have sheet the to to quarter support of to remaining first alloys increases pricing price sheet Midwest alloy weeks. From to quarter lead the to that spot for to continue commonality of standpoint, strengthen. increases stable common X common a are are price sold price XX seeing first common ahead announced with aluminum in sheet aluminum for remained XX markets. sheet fabricators to of Looking weeks. The XXXX, a XX our times are fourth should Most in the products pricing optimistic we the aluminum in for Aerospace the times, an conversion will end lead metal the relatively Demand variety with at that combined aluminum strengthens higher support. increase conversion with lead quarter.

the our end stainless into products, primarily equipment flat Lastly, production demand steel remained for which are has and sold markets appliance kitchen solid.

price Our products in the of driven two during November which Demand September products price quarter, January the supported in announcements, discount a were price for steel each stainless fourth stainless your I'll increase price by increases. time average and two for flat for further turn to increased is selling our today. reduction for that, there the another strong. reduction The steel quarter potential over financial market. point commodity to stainless fourth of primarily remain you now we increase results. Karla? XXXX call Thank the With review Karla support has attention discount and believe, point a in domestic for

Karla Lewis

Bill, good and Thanks, everyone. morning,

ton tons price sold quarter of Compared sales in the quarter net our up sales fourth the billion, XXXX strong year-over-year. down quarter selling net X.X% with to X.X%. selling up with of price average sold our our XXXX per at tons Our the down X.X% of average and up up our were from XX.X% sold third X% X.X% were fourth XXXX, $X.X

of anticipated. levels of all we across previously, the and to million stronger quarter quarter categories in of more commodity XXXX the dollars had sales higher $XXX was the XXXX of in resulted shipping prices the quarter combination compared in The environment increased our overall than pricing As discussed fourth of fourth XXXX. fourth

were our XXXX. was the selling up up sales For Tons to X.X% second company's net year, history in $X.XX $X.X average sold XX.X% were compared in and at price up billion our from XXXX. our billion, X.X% full highest the

of margin up XX.X% and XXXX third XX.X% down fourth XXXX. quarter profit in quarter of XXXX, in quarter gross from from was in the Our the of fourth XX.X%, the

margin Our XX.X% compared full-year gross to in XX.X% XXXX, in profit was XXXX.

that at high of resulted XX% the gross proud billion. XX% XXXX our at record to target margin end are profit was $X.XX range of We of and gross in our profit dollars

LIFO of $XX.X a higher higher million of metal As for inventory $XX.X income adjustment charge expense million or was year-end at in of hand in result This the of XXXX, or cost credit the XXXX. prices end resulted net XXXX. in a our inventory compared to on XXXX than of evaluation

offset $XX.X metal XXXX cost by than full XXXX. Our the lower hand on the prices market time, $XX.X be this actual our means year-end was expense or was our of cost from XXXX, inventory reserve. we million in end will increase that At higher for which will reversal LIFO million anticipate at of

currently to we result, of $XX a million As quarter. the or year the LIFO $XX for XXXX estimate million expense

years, our expectations in and upon inventory will we based prior pricing our costs update trends. quarterly As metal

of a XX.X% the were XX.X% sales, of and quarter XXXX SG&A XXXX. percentage in quarter As in quarter third of down expenses the our from up from fourth fourth XX.X%

sales. XXXX. expenses included bank today. in debt. million found in release be servicing the compared million to adjustments our in SG&A were XXXX, For XX.X% that energy November XXXX, related earlier were decreased our refinancing In prices $XX.X to our recorded higher Interest compared we $XX.X which $X.X due are issued million XX.X% market. increased of XXXX XXXX selling down mainly earnings in decreases XXXX sales, mainly which to XXXX year, the businesses from primarily in our our note The These the XXXX charges year in the to senior due to year-over-year X.X% can of expense by our compared were to with impairment for net amounts end non-GAAP of

XXXX, non-GAAP accumulated and and X.X%. XX.X% reform tax in have benefit margin the tax a Our tax rate of provisional up full was been reflects The the million in December of a share. of $XXX from Act Cuts pre-tax tax a XX.X% enactment the impact $XXX.X a XXXX resulted XXXX. the quarter million, tax benefit overseas one-time for and fourth $X.XX $XX.X XX.X% XXXX Jobs pre-tax reform effective tax income Tax the million Tax or income deferred in and the or resulting for diluted in assets fourth of provisional of our on profits year revaluation per liabilities, reform for excluding of of would impact quarter or

diluted While to we by XXXX Reliance our continue million to XXXX taxes the to XX%, of Net tax million. reform, income assess quarter of approximately $XXX.X expect be we range attributable to fourth $X.XX the for effective our will per impact tax annual the share. in $XX for cash rate currently or was XX% reducing of

income share. Excluding tax third $X.XX diluted quarter the $X.XX impact of XXXX in diluted or per of compared in to and quarter Non-GAAP of share was fourth reform, the per the earnings XXXX. $X.XX net $X.XX $XX.X or

was income Reliance full to million or net the year, diluted $XXX.X attributable For the $X.XX share. per

net share, history the in $X.XX per Excluding $X.XX diluted company's the share diluted per to at of per tax was diluted impact second highest million earnings Non-GAAP XXXX. the was annual $XXX.X in reform, compared or $X.XX income share. earnings

our million and management, capital levels, during our capital our cash strong in higher generated -- XXXX. along million average operating result for $XXX.X gross effective to prices as we activities working sheet million a expenditures, selling invested with in $XXX cash common Turning and capital profit shipment paid an billion, acquisition, and $XX.XX of our $XX.X flow, margin balance XXXX, debt We from and cost $X.XX XX, a paying dividends debt stockholders, December was repurchased at resulting down in of At total our $XX $XXX of debt. million of while our XX.X%. net also share, stock average per total worth to in outstanding ratio million to

targeted multiple financial debt with in to net profile. X.Xx Our EBITDA line our was

fourth over revolving had of $X.X As we on end facility. available billion of the quarter, of $XXX the credit our million

average compared activity in in of As XXXX we thus strong regard compared and pricing console XXXX. would with quarter first metal X% fourth recent of XXXX. XXXX, the on We the XX% given pricing estimate quarter levels in X% the the be the up our far. start in Further, are to XXXX first of price to that be the to our quarter have for quarter business to outlook, we of of first supported will expect selling fourth been XXXX, quarter increases of to as optimistic

expect pleased directly the outstanding currently and very with be will the As diluted XXXX, we by our our $X.XX for operational attributable In first managers of of a financial range we $X quarter closing, overall field. earnings to execution XXXX. the is are to share result, per performance in which in in

our the return growth Our strong us continue stockholder and balance sheet provides to foundation activity. executing

That our both attention in and fourth at concludes our Our you repurchase of quarter Thank remarks. of in XX.X% of XXXX, your for to management team outlook favorable $XX have confidence million the dividend in pricing. call and Operator? Board stock and prepared first environment the would and open common time, demand the the quarterly this we to during in and of current questions. the like ability our up our quarter reflect affected our on increase to XXXX the execute for


[Operator question-and-answer time, from At from question Chris this Bank. you. Instructions] Our go ahead. Please Thank we session. will is Terry Deutsche a conduct Instructions] [Operator first

Chris Terry

Hi Thanks solid taking for my questions, done on a result. well guys.

said I had question is think on the just First for CapEx, $XXX XXXX. you I

growth through split? that, different CapEx the to and talk be projects You to is that how how expected able

Gregg Mollins


as our million $XXX reported million, or in we is related about initiatives. of growth far As that the XX% of $XXX growth that initiative

Karla Lewis

don't on projects. based or existing expand individual operations. that's can we many processing -- CapEx And through projects, various us up as dollar we for of a equipment, lot got But projects different of so our our capabilities made a quite value-added in growth different new We've $XXX Chris. different its few have of million

our So bit it's a quite company. across spread

Jim Hoffman

into then our new And closer so can go operation, to get dollars Yeah, a of customers. lot we those this was Chris, Jim.

other closer calls, more do build on in to our are before our we location to said sometimes lot are customers going asking to new us locations and them. a need to we've expand actually As brand a

As lot lot technology, adding. tolerance equipment of our mentioned, we're Karla better of, higher that

XX% consider rest a smaller growth maintenance, as the So project, kind there's Gregg of lot what of lot XXX projects was in that a of was, replacement. of would big we said

Chris Terry

Okay. Sure. bit to quite execute And then the commented a companies seems just and pricing you sector just strong. little outlook, the the but the the willing on I M&A you positive on Can going comment not given assume on that before, that sell deals overall it at really moment, backdrop actually given ability to environment. the

Gregg Mollins

I don't XXXX, up that, is Well, about know her picked compared XXXX. activity, okay in as to our actually

is there is, there to lined up with get on move obviously, sellers' the themselves acquirer. potential parts So some

there, cetera. of mean cultures, cetera, be and we management runs look out, at our knocking look teams actually since have from profitability, activities each year. your we're first going doesn't take point that what at So et merits, to to activity by view, et on our But a its better we've we're home one an own encouraged

Chris Terry

one me. thanks. And the last then Okay, from

Thanks. timeframe market, bit think guess outlook you Just a the of market October specifically can plates as that through been last can I I year, chat you And on, strong can rises. then you you on price market the there. just, elaborate well? the since there's where talked about on little stainless bit a the but

Gregg Mollins

take to want first. You

Jim Hoffman

increases carbon be the of I'm The until rating through, on which of up their controlled I a big -- are Yeah, plate been yesterday supply order XX.X% good, is on in actually demand for side, in demand, of One based people increase they'd a demand way them, all the price sure a coming on sign some the input busy. $XX like The have good to lot is price is there the uptick figure mills last slight saw range issues. charges. some good looking which and mill has is capacity busier. is entry,

it's demand was. than it the on So plate better side;

Gregg Mollins

X saw demand. to January weeks, demand more weeks. the all seems XX there the we've to on market out strengthened increase story about be seems times support, XXXX, X we it to similar very the in a demand through X based have stainless The on to from and side, moved strengthening seen lead discipline pricing have Chris, to

So very the outlook, there positive. is


from is from Martin question next Our Englert Please ahead. Jefferies. go

Martin Englert

is, that's everyone the good XXXX as on well morning how results participation you year, how aluminum changes and there. changed the and market and volumes the to grown your One were? within what congratulations as may maybe And from tolling previous able share carbon are have some strong Hi, there. discuss in you

Karla Lewis

So, for on this processed our We we've of tons tons said for company. few rest we business, now. sell our and sold tolling sold actually tons the our the years more than businesses in tolling the

our tolling in those We that with it's and processing, we're both of aluminum businesses. volume there. seen capacity So substantial we've to year-over-year. see do We've in a handling amount our increase that tons the investments made continue carbon grow to

a more a aluminum had shift We new are business bit a carbon to seeing but has the been tolling that mixed of we've us. from aluminum for

have and business that. carbon the lose place didn't we of aluminum So in

are to us. for tolling we that aluminum seeing business grow continue So

as investments expect recent out the still aluminum improve discussions, continue see we very that solid the the some side made continue to on business us, well. we to carbon same based business steel we've carbon there. of important time said, the we As And processing for to is at and

Gregg Mollins

in The brought new aluminum that usage because areas. onboard of we Kentucky plant built in particular those specifically was

So our this them, to closer to done. be asked we've which customers

XX%. -- working Jim. About at capacity it's wise, think running I it's

we've for ways there So we've strong but go that. to backlog got a got

builds -- aluminum basis our what our our But volume basis, -- and But So, much seen a but fact so haven't the total not. usage seen on pricing in of we've we vast some that same seen we steel improvement of operations a other our had drop carbon regular some drop processing than on carbon through off the really haven't store steel. far. outages have in a

Martin Englert

some Okay, to company's excellent. of the as the some have infrastructure, provide cycle. regarding may detail you if that others other. such last could could, the capabilities recalling if there. Thanks Maybe I leverage non-residential comments all group one expanded acquisitions since P&A the for prior sub and And construction,

Jim Hoffman

other Yes, years. this got XXXX. of XXXX up -- and -- or to bodies, a back take is to that we've Jim. continue our And We way than get to and but there, have construction. we're and anticipate is long throughout kind the three upgrade two We've we is over which additional of shape We're the slow up the to probably some of last equipment a mortar brick there seeing nice recession. the We XXXX, a adding a we're a well without continued It's if gradual demand. lot go timeframe. through does on still increase things the to positioned burn work to top, in good probably in non-residential couple nice

we're shape with good So that. in

Gregg Mollins

the construction, Roughly third in our about of business a infrastructure. that is includes non-residential and also

et expense on place, mix. part facilities then improvement Jim and or big have our a we've it's got bottom very more just the we lot some said, past a out, tonnage to line. in add take brick as So over and we got, And we've place, cetera, cetera as et in little had mortar, equipment can and steady of pointed Jim years. two But three

Martin Englert

the you last do of the was cycle? non-resi percentage as Where during sales overall a infrastructure think sub

Karla Lewis

it's for our tell going. hard because of Yes, product is base where and us to customer

But we can't revenue percent business a generally that. mix the -- dollar we of dollars. on a just think look it's than Gregg kind product out said, of have at get we businesses our granular third and much more as So our really of there. We about

Martin Englert


Gregg Mollins

the the growing, of If industry any largest consumer it's move country. construction it's just in steel out you infrastructure non-residential and carbon of -- products

steel products. carbon see different the price the much And is stronger all products. we increases, with all so drives because in generally demand it that, So


from Our next ahead. question from Company. is Please Novid Cowen & Rassouli go

Novid Rassouli

Karla, of kind but story does of of remain same from charts off some kind administration. of Congrats results. Gregg, just this tracking to the morning, Good you Good And growth Jim sort year. the last relative and Bill. can a or us with give incremental nothing the sticking how are non-res, on things morning, time without dramatic action the strong sense current the gradual

Jim Hoffman

agree about positive. we same feels we Yes, quotes It's with getting think We're last that. we better. I as It's earned. the incrementally year. the It did

them, said we've spot. campus expansion. XX-storey the the we we building, four the our home to get. that then. is guy what come does which That's going see. We we're And customer to do We they the guess As drive, added the what does story helps a value invested back the we our we're to to you that's more ask past, different That's continue assisted or who bottom that know, online, things. when not do continue And are equipment us sweet recession, in line. guys for college able XX, to in as living we come

at kind with like of assessment So off. yes, feels of I -- year last pace nice agree your a gradual

Gregg Mollins

about today, put in the on very would impact positive a as is next been the given and be it that that very in at that and in pretty very, sector fingers a all do would this actually very sitting him, our and optimistic private But as something very, room. bed some nonetheless, were We started would have hopefully that happen, we'll -- for but well. us. that administrative it it few helpful certainly the got positive months. a will if on waiting as see impact, we stuff we're be have invest for cash can But We've year throwing

profitable Some market. of have in the companies non-residential the committed the corporation are construction most we to

Novid Rassouli

that wondering, guys you the a products are kind the it's to little forward. gears a -- to respect be it. that Thank if just I starting this try how picking of overall and quoting sense the in maybe as Got look further -- any then board bit of kind And gas if you helpful. is standout, get is activity specific of Very across towards up just seeing along. can there more recovery began with side, get to switching we If am the you. XXXX

Jim Hoffman

Yeah. I the board. can -- it's kind across of

the in the OCTG, everything or those to heavy a we're that then got and between. a drilling it. of big drilling line are lot get remember have completion attention. two companies And do we've and We in completion We're lot hitters pipe the in -- in not in a of and lot that

and so are more been mostly So the but more we drilling on seeing far have in are well the the doing that products side, activity completion side.

from from higher to alloy material everything price to every collars alloy it's a -- of to that to its bars tubing everything drill different heavy jacks. lot alloys, wall So into pump product, higher goes Christmas trees

Gregg Mollins

alloys Primary end. are the in bottom line steel on carbon


from Please question ahead. go KeyBanc from is Capital next Our Markets. Phil Gibbs

Phil Gibbs

operating the Good morning. question A on expenses. was

costs you excluding you you accruals expenses as noticed we're baseline be expense the year. I weaker to the what the good trying terms up because doing are of some bonus quarter? a we other volumes. then assume have been, But a the seasonally that had about of noticing quarter run comp first environment when what had were guys fourth would can of using business higher that quarter-on-quarter component operating also talk in should we're think because great I rate get freight just -- may we for and

Karla Lewis

the quarters not Hi, predictable just as year, do expenses, But the quarter, we in things. of have during fourth fourth because because and the year-end SG&A holiday usually other quarter. the Phil, on as overall that so true quarter pay is up

we're much. employees as So still for shipping We're even our paying the holidays. not on there

our we'll so own delivering provide, our to customers our employees. its our the you majority product bit. delivery are services done a that, always So fourth our them. but hits affects we of But yes, And is that's trucks, costs the Other that that the the what that for, on of expense than that's know certainly of of part SG&A up. some passed, also quarter charge one and line, our with our we freight drivers

in to are So to pass parties. our that companies customers. fuelling up, I hear that items squeeze seeing some third more through some we outsourcing think industry to But model, try our we're again other those or not you of our from of certainly in the but

higher, you our again QX, line, year, to run Run it's better last provide cover of that. We bit going forward, rate have be be of QX little increases did higher rate. normal are SG&A consistently if employees. also XXXX, done SG&A as line probably we those should into we So wage is revenue do, the but a to the could the a look at like type

higher you XXXX should in increases, the inflationary expect because run So be wage QX, factors to quarterly our than healthcare in our related rate bit of a increases, XXXX, XXXX just to et cetera.

Phil Gibbs

I US, non-ferrous Okay. and maybe think had in of you're the some I your up the noticed setting That's helpful. -- your, outside think Korea about I talked business you that in in think the be volatile, know very bad and at spending, could times. the talked the strong China. can be past, very at semiconductor I I extremely times we've good and weak

you of So the the the timing time, all you're what that and gives then given where at investment to you the I'm making cycle just that gives making out trying what confidence you, is? right are balance

Gregg Mollins

the you're China somewhat and outlook but last semiconductor making this those of making is that Yes, right. semiconductor in one is which the US market. are it's positive, new is The we positive, very investments. side the And strong, in Korea is services extremely is year really to volatile, focused. India, outlook was and for the and all-metal focused And carry it like all does we're that, investments looks reason comfortable that It aerospace the tend saw on be to we're the on which the other year. through investment, here some very then facility going in

Karla Lewis

XX we've market, I Korea, about so And been that years. South in in think

not there, been we're So well. current in new outlook. of and pretty we've a we now while not the well China that jumping We're been for because a know just in market We've player. as

operation. So those feel we investments making comfortable in do that further

Gregg Mollins

there out, years, about in we've our capacity Basically pointed been doubling as production size of we've XX Korea, South but you basically the there.


paying time. and we putting think its speak So money as I it's we're things right add and dividends a the good investment but

Phil Gibbs

new these are these the trying pull? customers? just I'm or customers to Are for existing gauge

Jim Hoffman

business some expanding also. major new some customers operations there and that for Both, their are are that in

Gregg Mollins

vast existing on But production. majority the customers, is expanding their

Phil Gibbs

is is the talking for here? aluminum most this we're industrial for that part plate And about

Gregg Mollins

that is that of in polish chamber investment into the Some industry. goes the tubing back electro

major play. stainless That's So we're that it's all not, investments are driven. more Korea steel. not And and in about it's oriented tubing talking the in China plate


Mazzaferro from is question go next Aldo from Research. Mazzaferro Our ahead. Please

Aldo Mazzaferro

all at first Hi, wondering, pass on good pricing-; morning. Gregg, are on And that will dollar time two one indexes. of forecast that quarter. dollar I I'm for in the this probably mentioned your pricing on the higher you the able trail the getting sequential on have the XX% the ton? some you increases questions you're to

Gregg Mollins

how we immediately Yes, announcement. we much capture will. upon can get But question is the main like

particular you steel okay the spot As our of in business. business majority carbon know, products is vast in

very on have we business that. So little contractual

ton, just take made, this announcements we be on was ton a mentioned literally learned So the when Jim will the as on steel our $XX effective position would carbon we about that morning. plate yesterday, $XX that price a books

average We order. little is order will --our get with bucks per size work over X,XXX

that companies orders it's charging So okay, shops, $X,XXX them obviously and bucks tremendous or job with X,XXX we're doing those whether big amount smaller companies, of not placing X,XXX, or of business you're deal. smaller the a

the that There price time inventory So three recognize in months our it, position. and day, pay it. get the times at on of not; we've of the sophisticated it they of at But just it's announcement. we matter producers get of it's Ag are those likely going companies, XX from large increases get not And can get a more today we get lot fact okay, what floor, we of; days the a But you or it now. that they're end will a announcement. do at got

Karla Lewis

we indexes is you in got product about mix. the talking the potentially and -- you you when why the and that's in QX, you're mill looking one effective QX have think are about think of of to trailing about our what things of, that increases at And already was whatever XXXX. And factor Aldo mentioned Gregg that indexes some in

us against a there, you're out into also. consideration we've indexes the coping had how So depending take that

Aldo Mazzaferro

trailing thinking just you're that to kind going of be bit, I'm right. Yes, always a little Great.

does the think more do do you second the mean quarter could now think is you semi-finished think XXX Trump steel with can front wondering So think with going other big do protection? into you to of of and in friendly fact up have in to market, demand towards steel, the have do bigger some nothing? seeing Gregg, into take given got the you terms market potential but it in we're if lower he to the means up, I we're if going some picking have maybe trade go. the imports, things the, major countries you now the probably the catching quarter facing first without But the market what my I'm section he and we that you you any announcements, do-- just do market. in President risk disruption causing him, than question is

Gregg Mollins

anything I know let regarding to tell knows. to about what XXX. confused go son go into in June, I in most know go by don't about effect effect suppose you me supposed so to a cases. XXX June, in hell August, Yes, -- gun, I'm the of who the didn't

based the it know. think not went our and of know quarter company Okay, percentage based we continue all says the all that to lower, we the, they down we hope. somewhat, we I the on know fourth run are go what is We going And don't Jim that they're that imports run on at basically, down be, probably year. going there to at is to

than hopeful We're we mills Okay. time increases the decline. that to like room but we prices same discipline. that for But continue we are lower, use we the higher hope think -- price is because there's more imports at there to some

that spreads want White answer great, to better good the So you call But your XXX, the in you come more. to don't imports become a House. so get really if

tree You barking wrong are the here. up

Jim Hoffman

They of to and books regardless cheating mean, add are cheating product are there and out the whether or fact, the loans cheating. we there on are decide And thing into laws. countries product United is dumping the a enforce are books us, who That's calling laws flat that country. the dumping one add, and already Aldo, they're new the just I into States. on their what to


question ahead. Markets. Phil Capital from Gibbs KeyBanc from next go Please Our

Phil Gibbs


year? you that for had a your LIFO. Thanks. that. Karla, Are basically on QX just behind of the hold the I in terms think assumptions of your levels the what question assuming I through are follow-up guidance course pricing

Karla Lewis


full have do we the make estimate an year. So to for

So of outlook. is estimate the our our with on $XX million current based expense

think the we've current down. they room business further a a think will and Certainly, long in for we some $XX been go But pricing So we hold this does is do that at year $XX.X be and $XX of go million little the room leave upside. for to prices estimate of actual million time, kind we year. compare there expense throughout our our up end that -- the fluctuations higher than the year. were But they the overall, we of expect XXXX are prices expenses a of at beginning And little of million. the than more

for So you expectations of to XXXX can kind pricing use be as that what our did XXXX. what of in are a guide

Phil Gibbs

very Thank you. That's helpful.

Karla Lewis

XXXX also at XX, which doesn't not our December -- the cost hand price starting inventory -- was I point. is reflect all did lag increase announcements. on a our time it Sorry, Phil, And remember Because that

well. some price LIFO XXXX as will increases based get is pricing of affect So, on in XXXX the QX, increase


comments. session. to Mollins to This concludes the back question-and-answer I'd over closing turn the floor Mr. for any like

Gregg Mollins

to Reliance. here you. like suppliers day. our you continued forward customers, to year thank stockholders I'd participating team for commitment at have in and I'd their a the look and our Thank of call. gratitude all to a behalf ahead like On employees, support successful Reliance, to of my great all to today's extend also for and We


teleconference. you today's Thank your again participation. for concludes This

may You time. your disconnect this lines at