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RS Reliance Steel & Aluminum

Participants
Kim Orlando ADDO Investor Relations
Jim Hoffman CEO
Karla Lewis President
Arthur Ajemyan Vice President and CFO
Bill Sales Executive Vice President, Operations
Seth Rosenfeld Exane BNP Paribas
Satish Kasinathan Deutsche Bank
Phil Gibbs KeyBanc Capital Markets
Alex Hacking Citibank
Call transcript
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Operator

Greetings. Welcome to the Reliance Steel & Aluminum Company First Quarter 2021 Earnings Conference Call [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to your host, Kim Orlando of ADDO Investor Relations.

You may begin.

Kim Orlando

operator. you, Thank thanks conference and financial of for you Good to to discuss our call XXXX Reliance's joining morning, all first results. quarter President; President joined CEO; am Jim and Lewis, Arthur I Ajemyan, CFO. and by Vice Karla Hoffman, Bill available the Sales, question-and-answer be call. during this Executive Operations, of also President, Vice will portion be of at investor.rsac.com. will the section posted recording A call of Investors on this our site Web performance assumptions conditions materially certain expectations that information be our control implied other forward-looking cause and results, company's from or of related subject risks, The operations the on which statements. a the results, the this number may unknown on press other COVID-XX the and may on company to achievement of which under economic statements factors, different performance of be change contain the are are to impacts and by may not involve or based release call and pandemic including forward-looking known or the or actual these future the uncertainties factors limited other press or company's and are disclosure ended with caption our factors Factors XX, XX-K morning Form this Commission. XXXX, Exchange those not files the December for Risk to, but report on the under annual in in documents the Securities disclosed Reliance release and These include, furnishes year the therein the and The herein. and duty as disclaims company only information and date press the today's any provided release update information on speak this of call to the turn now will over Jim I call Reliance. to CEO Hoffman, the of

Jim Hoffman

financials. today high Arthur trends overview market, will Karla quarter XXXX operating to today our discuss and and morning, XXXX first our a our you results and us a and first with thank allocation by quarter level begin demand performance conclude results. will quarter everyone, of review speak first capital financial to then end will priorities. our all joining for of I Good with

of dedication up disruptions quarter, global led record safety carbon first by performance We order their resilient supply with during steel along decentralized operating for and of for third companies quarter in for favorable during up despite market business chain small to in a our achieve of in the quarter operational multiple ongoing improving fourth family record outstanding strength many of XXXX. geographies products price like ongoing quarter first XXXX. sizes XX points my excellence products, demand from consecutive of pricing the increases quarter and to first thank and to health, coupled leveraged profit in personally with I within metals of experienced markets XXXX gross XXX Reliance resulted margin diversification and structure, financial all and the Our XX.X%, pandemic end and the the the model constraints. would basis various from the points execution markets from basis of colleagues

quarter period. and record record Our above XXXX, prices million from on of the prior selling XXX% over up quarter average quarterly of to income expense the with first prior pretax in contributed up well focus $XXX gross our and our control combined the continued profit XXX% margin year from over expectations

quarterly of share substantially and a Our earnings our outlook. exceeded per $X.XX were diluted also record

times. use working in goal significant management $XXX.X We company we are wide from low working typically from in result quarter first of Our experiencing. metals This compounded working capital improved as significant $XXX.X X.X fourth the the turn rate strong we rebuild by the rate capital despite investment. to operations X.X of annual a inventory our resulted our and cash costs quarter capital million turn of as XXXX times, effective levels, increases surpassing seasonal cash quarter XXXX earnings in we in and million of flow first is

and believe is contributor advantage to management. we inventory sell cross model collaboration lead and scale family to to Despite needed domestic by inventory a companies of our source of shortages, differentiator our times ability inventory Our the enabled among the extended our standing our and our metal improved mills and significant customers. companies, key which us our among of mill relationships strong with was long family

Our our the maximizing valued field managers on availability margin customers inventory effectively opportunistic by in supported ensuring while orders.

Our returns. and enables capital maintain strategy enhanced liquidity both stockholder strong generation to cash flow and position growth flexible allocation significantly us on focused a

projects and capital facilities. many XXXX $XXX new maintain our million to expenditure Our other upgrade of include existing buildings budget operating of and expand,

cash expenditure we in factoring in COVID-XX, outlays the when be and equipment due spending. capital our XXXX for to delays potential flow our holdover project million to closer lead prior believe will extended due to However, year times for $XXX

we $XX.X invested capital to During and business the including opportunities several back exceed XXXX, our quarter and expenditures, into through customers’ needs. address our million of first suppliers' growth

footprint. toll moving tolling, greenfield Texas invested the possibilities see more capabilities we've are our toll November Operations service commenced our for in Kentucky instance, about primarily our toll we've For have increased new offerings steadily since. opportunities customers in very facility and producers on significant will in processing forward. the given many been Kentucky, and processing support on XXXX in focused carbon metals capabilities in who processing Construction these their our We're end Texas excited future steel ramping which toll processing capacity and expansions processing at and in our experienced our to expand ever facility toll throughout demand continues customers. of our

to innovative efficient the our products mentioned certain are processing as highest energy last our well the continue customers and of solar we on services. As providing and in quality facilities, as in installing panels with equipment call, lighting investing additional

Turning to M&A.

businesses our earnings candidates. pipeline stockholder as healthy to criteria, to businesses return turn our transaction a opportunities, of in addition service of targets family metals a potential our activity. evaluating I center see to will strict fit you strong on including traditional including broadened ensure continue of focus our universe companies. to prospective Nevertheless, quality when now within in of prospective maintain our will We we've we adjacent acquisition

first for without years paid we rate. quarter million the ever our or regular our suspending to $XX.X payments stockholders. consecutive dividend of maintained dividends We've XX in XXXX, reducing quarterly our payment of During dividend

In X.X recent XX, fact, IPO, most increase since times quarter the At program. in million March approximately stock first dividend XXXX, XX our shares remained XXXX. of XX% under our XXXX we've for repurchase including increased of our the available repurchase

during expect prudent execution strong our demonstrated of opportunistic activities, We I capital of maintaining summary, return our flexible by by XXXX. remains growth, repurchases to team common first stockholder quarter of entire the which focused stock. on remain including by operational priority a both and allocator the approach top In inspired am the our Reliance

in innovation, focus Reliance discipline, us and from model, when core diligent the pricing, of the both believe metal good availability, and strong generating organic on customers and our remains of including extremely unwavering elements earnings. times management, Reliance control we position Our continue high a from the health many strength strong perform growth bad. and limited expense to business inventory to safety, well of enables In environment needed pricing characterized demand current by metal positioned

liquidity strong customers of continuing we our our needs value while support our growth returning suppliers, the and stockholders. to Given to and forward to also position, look

that sustainable attention rebuild. today. Thank the a and Reliance to turn time our operating to trends. confident support America remain going communities for will and colleagues, lie that is call opportunities to customers, results through you your ahead. in our continue to and I will the both We manner to and review now suppliers over We challenges need demand Karla Karla?

Karla Lewis

in Reliance demand Thanks, XX% guidance of would improvement the quarter. and end markets of which in during above the of our family XX% Strong majority good to like volumes experienced increasing sentiment their our all for the tons in the colleagues XX.X% quarter, by compared first conditions the within resulted typical Jim, fourth morning, thanking of amazing performance first everyone. within was shipping up we and I our sold quarter. Jim's our to in range echo companies the to seasonal

demand healthy first the pre did continues reach most While and XXXX. quarter our were quarter improve not levels of and X% to down first pandemic shipments from is in markets,

these believe economic customers only our including day disruptions and stronger various The and and for products. materials increased good demand levels given supply for components labor X.X%. demand, coupled and future and notably shortages. per And is holding the our a we metal limited activity pricing. in news shipment of sell, many on most strengthened This sold first tons in and chain factors our trucking were reflect, basis, we suppliers, steel quarter expect factors for many periods, is support constraints, fill metal our resulted supply this throughout back products down us, metal to underlying input the However, rising than demand costs carbon prices accelerating we availability, metal with

the exceeding believe time basis XXXX, quarterly price selling increase by first conditions we demand fourth margin. to a basis an and up to average our day-to-day to of of compared measure of XXX profit a On of robust our FIFO is and compared high profit of increased quarter XX% best Way XX% which quarter go team XX.X%. significant to contributed performance, we XX% XXX guidance quarter XXXX. margin XX.X%, an a the of all operating basis, Reliance. non-GAAP of up prior the margin record These gross points the pricing points achieved gross to from Our

the once end focus supply, excess which the by gross high limited markets. to mill of pandemic enabled time incremental improve which first of their largest metal of levels. margin with quarter was in we and I'll who announcement metal to outstanding level shipments the the record benefit were selective and pre infrastructure profit overview at market approaching execution us for margin serve, higher levels. again very strong implemented receiving capture end turn key our Our in construction, the includes nonresidential is higher of on maintain to increases to effectively already Demand inventory, an result margin continue into our cost now orders price a given managers prior field,

the aluminum to strong We processing demand of OEMs provide we experience levels. retailers, quoting remain saw continued believe XXXX steady We activity toll facilities, with we quarters and healthy for to healthcare centers, in data projects first and quoting automotive And and customer warehouses both given production. activity surpassing market, processing our current solid in ramp large continue the and others. positive steel will at fourth to services for among continuing big levels schools, mills activity backlogs, for box and automotive strength the demand sentiment,

all signs experience of serving limited Demand as cycle. market in expect to our a compared first global trough continues to commercial continued result levels. and the our minimal date roughly only operations exposure. aerospace Demand of impacts fourth of equipment from quarter quarter our aerospace machinery increase to semiconductor expect the for continue saw tolling you we processing to Demand improve was production, demand in inventories. strongest strong. like agricultural manufacturing current expect industry and quarter the in remind dealer customers Semiconductor the replenish that at of and XXXX. heavy the strong to impact we demand we of volumes during to In believe and one customers to for the this strong both microchip the disruptions shortage, in aerospace our industrial to fourth continued of aerospace, XXXX, demand end commercial meet to to Absent processes production that for their customer The construction remain to which in was improvement represents I'd first first quarter continue. the as half we be automotive Importantly, strengthen space quarter levels the to regard of used markets. also tool began our

improvement We expect limited XXXX. throughout

aerospace demand noncommercial business defense the with the for hand, market military, the quarter. anticipate other of backlog demand the remains in We our balance and in year. space the the strong of improving On strong continuing during aerospace portions

that natural is our commitment the this with the health times model suppliers and to and these momentum during anticipate only XXXX. for continued products. to which and our the second We and we slight the customers certain can extraordinary colleagues have strong Finally, towards review I second deliver our challenging who results. modest recovery We strong an and us do throughout day quarter now Thank with and saw partnering given needing financial times. Arthur? that We turn remain and entered you Reliance excellence quarter to of customers very a current inventory replenish first gas, for in end creates to results. demonstrated prices demand with our XXXX sector, dedicated energy safety and quarter to Arthur, all. operational improvement of key over a optimize the demand the environment of pricing every mainly the will oil in oil call will

Arthur Ajemyan

Strong morning, turn our share. gross profit everyone. and earnings which quarterly demand profit record Karla, contributed of pretax pricing, drove margin a with record dollars, and recap income good and record results. gross healthy start record I'll to Thanks, in per

demand sales. year the increasing to Turning The were over healthy XX%, to our our of fourth sales resulted steel over prior carbon most the period, XXXX. XX% up increase supported our significant the sales momentum and in metal first Compared quarter by pricing quarter first quarter for products. strong pricing in

with As expense We annual of XXXX. million XXXX a gross revised LIFO of expense fourth and XX.X% profit margin our $XXX the in $XXX higher of $XX added our million $XXX.X to our sheet than reserve record in first investments steel expense the each of This allocate $XX.X the estimate along of million on rata carbon of due income resulted for LIFO first and margin million. LIFO quarter, Consistent costs a anticipated was balance we first of environment, continued first the LIFO million on estimate from LIFO of quarter. pricing quarter higher XXXX. and quarter our certain gross mentioned, compares pro on in basis quarter record million, our Karla XXXX. the collectively accounting Jim primarily annual in of the strong incurred the end in in orders processing At quarter policy, to of products. million our quarterly to value $XXX.X focus in $XXX and with profit capabilities, We

our such, current XXXX of projected for second LIFO quarter As expense million. $XXX the is

our inventory will pricing trends. As in metal upon prior quarter and cost our years, we update expectations each based

our Now to expenses. turning

the The record based Our was offset period, compensation due and lesser was consistent XXXX XX.X% to reduced extent, X% with of Overall, $XX.X or compared a by comparison first and increasing lower levels. quarter flat increase quarter SG&A pretax income. result expense to of as to headcount, to SG&A of due XXXX increases. volume result down was a end prior compensation strong in generally higher momentum. record given profit relatively our In was traditional to to was approximately the inflationary a and of year the year our consistent year-over-year incentive roughly mainly quarter-over-quarter fourth expense million remained earnings wages seasonal due levels trends, headcount which pricing and higher with incentive gross

our We XXXX. management into to will maintain as expense our further disciplined approach structure expense progress and continue to monitor we

in diligent the due first Our strong represents non-GAAP and company's to our history and and XXXX of million $XXX.X increase was pretax demand quarter million income XX.X% $XXX.X first conditions, of quarter XXXX execution of in highest or from pricing expense an management. of favorable the the

pretax by a year non-GAAP exceeded Our XX.X% margin points. also period income the prior was XXX of record and basis

in anticipate up tax mainly XXXX, XXXX effective year to We profitability. first XXXX Our currently higher first XX.X%, a the of income the effective full XX.X% XX%. due from tax income rate for of quarter was rate of quarter

from of result of the all per generated record quarterly our of first XXXX. a first $X.XX up first the XXXX quarter XX.X% a of share in from up $X.XX first earnings we of of share were in On to in As in factors, XXX% $X.XX non-GAAP exceeded XXXX earnings and our XXXX. $X.XX $X.XX basis, outlook quarter quarter compared these quarter significantly quarter the of fourth per and the

cash Turning sheet balance to flow. our and

management our strong operations the effective to to during XXXX needs. quarter operations including despite working working inventory on $XXX.X of cash capital cash profitable due We continue capital from turns. of focus operations first higher flow and our Our generated generate significantly million

end our while facility, the $X.X outlook. the capital times. no first of revolving allocation net in XX to to I'll credit our turn outstanding quarter, to debt multiple areas of $X.XX our our was EBITDA strategy, investment on of with to billion, now resulting billion total us continue providing of As grade We a credit liquidity our all ample maintaining rating. outstanding on borrowings debt X. had point executing

the remain majority demand pandemic about continue, conditions strong of stemming the business we While markets COVID-XX macroeconomic from underlying the we in with end uncertainty serve. optimistic

impacting compared levels quarter the quarter in chain disruptions second of and XXXX for X% supply in we the shipment sold persist supply such to Despite first to estimate tons flat in our first of of the constraints up as the However, XXXX, continue factors customers XXXX. metal to be quarter of of many factors, these quarter will second will XXXX.

metal average will substantially ton the per X%. levels further selling certain near be will price are the quarter for X% estimate upside metal we quarter pricing current current Since price second first potential XXXX expect higher of prices products. We our the with in XXXX, the of to in remain up sold selling for average than

business open at our for we'd to up our That prepared questions. remarks. to the And time, another us to colleagues These excellent the $X.XX first Given priorities capital diluted investing gross range allocation second with our as the fundamentals, our we flow, on in and supported In of quarter XXXX all factors strength the our $X.XX collectively in robust in the executing cash we by demand strong for pricing to your share of these as in and well closing, value non per trends, Operator? earnings to expectations, in pleased quarter extremely of profitability quarter our like concludes anticipate currently Thank pricing strong and operational continue XXXX. and and by GAAP yet call quarter Based demand execution we're growth financial returning this of and record second XXXX. the you on field. performance of anticipate in stockholders. of of resulted profit our margin the enabling continued attention.

Operator

Seth Paribas. is first from [Operator question with Instructions] Exane Rosenfeld Our BNP

Seth Rosenfeld

to If achieved into your kick company into level passing as I realized margin on on costs the on catch you us in side? you QX on we inventory. you and cost compression up that to can before the some through progress of benefits give holding tailwind in gains going QX, performance is inventory to customers beyond? some Can higher expect comparable color question the the up in hikes or walked of you price how the inventory and higher you Should expect

Jim Hoffman

that's model. time, this Well, long our of we've been doing a part

us see customers customers our them equipment think equipment. the there and we've innovative business. them I able part and new to again and be for proven time service to The know an their we as we're of fact time of give uninterrupted production flow that with

we're we that real hard for So work let them sure haven't make and them we down. there to

to think the price, to us do can know want I with, time They go if beat somebody they So they and we business the down and on that customers try the price. the differently. of phone lower majority on they see elsewhere on

So market. we bring the what to we know

going So us. and suppliers we're continue And our our do works. it about to to care customers we that care because about

So years, these of over model it's hard tweaked we've last value decades more added. couple working for actually we've and real been a that on it do to

continue So going let going not partners go to we're and we our and let know customers our down. that it down, us I domestic think will to to aren't

at and is have of availability continue do right matter Reliance and to the real a service happens key now, you, of both those. increases it's to to to Because what able be to pass and So these well along. that to

Karla Lewis

Seth, just your a holding inventory on the add question to little to gains. more on And specifically

we folks said, been well. for our Jim has model very our execute I it mean, years on that and think As

QX. increase we did and anticipated guidance the than more commented given we had we’ve With as on, in prices had

we going quarter. were momentum able that to during the So keep

point, elevated and then in of profit will at for those in margins. works us we more model, see stop get in cost do if it way the some higher the our With as the increases some metal we compression gross

said, current price at our cost inventory strong constraint, But we're and sustainable they're that supply gross increases. are do bit some know that we there of seeing been increases don't for profit we continued because experiencing inventory a and However, into little compression anticipate, with average FIFO but of these that increases. our as level, we continued whenever the out pricing getting of more metal now, the have dynamics right strong I margins, potential really

Seth Rosenfeld

but you to working being pace in and gain perfect On for QX, peers. of sure or or a on as you performance continuing you your touched very benefit single to into neutral capital progress working so as start sense. more beyond? of sense the the a Should QX ever modest in good makes expect term working ability QX, sell to Can we give So the investment into as the not has potentially longer you across further us of expect capital and capital, prices that QX many how the in something stabilize? platform

Arthur Ajemyan

when kind in million you had, capital build to look up I we say, at QX, significant working which of $XXX to prices, our speak, accounts close the portion would higher receivable, a quarter-over-quarter. So of so us, particularly behind was

more any But wouldn't continued significant escalations. anticipate receivables. cost build with inventories, there's in we our So

probably going tax there's cash. build in And use payable on the be having be that's payments second some going of some then side, to to probably quarter So the there. anticipate we additional

to that the piece of us. say I somewhat think recap the it's is fair in behind up working large all the to So all, build capital

Operator

Satish Deutsche Our question next with from Kasinathan is Bank.

Sathish Kasinathan

you on the be is there across do question current available M&A seeing opportunities you first could in industry, the think landscape, high a and profitability when given turnaround? are My reduction the any

Jim Hoffman

the active. M&A Yes, front, it's

right see in We, call, activity service. said what didn't work continue them at also to and not adjacent looking made type year now last things that one XXX We at that's just looking looks fine, metal sense last businesses. traditional out. looked there. of over just But we're or at the the see didn't We're like I

this look you've come. prowl as the go three to kind we good they companies. we sure We're open looking year, for five year, always companies. good companies of on we're before, don't this I'm at companies So just buy like we're them heard to going

It's We we team. We strict those part There's part fine protect be companies. family at hard. to get things. some our done we'll It that buy a of into of criteria empty the they're are do been to We'll matter Reliance or time. no We kind it's care It's diligence they're can about look there. both. worth companies out to there them. long to worth continue people think we [Technical a out think XX for or not. just you our -- continue a model. proudly. to and and want period there. long of has There's company reason of do what fine of And things. work Difficulty] if because fit very of and sale We've a that for right proven period really a the that of due what the we've pipeline companies We'll have of is But good the time, over we they the they think in some

to that. So we'll continue do

to we're our Now M&A that's just avenues that of cash one the able use for.

to that So everything might we're we Karla, situation like have, companies really out in now right with good of without say a you to to cash. but but prudent part certainly the I look with a that. something have And thing M&A always know, is to And lot a continue that? that's we'll at. there's can I telling of all add there do cash, good

Karla Lewis

just that. add to on would I Yes,

is obviously, talked lot is the one and individually, in large than we big acquisitions same budget and ups, do. is our in at out see from but growth. CapEx that start at our As growth we a the year's they're opportunities new time, get growth part Those about talk strategy so Kentucky the one And said, of of contribution tolling across of a we we and our organic can we have budget. continued that Texas. are M&A instance, But the some last of two for operations about, bigger as network. spread that lot Jim We

usually that of always as don't when doing we So projects out I acquisition. some think this point are that maybe an it do much more flash an just similar those we we through acquisition, of to make

growth definitely as there So is well. continuing organic side the on

Jim Hoffman

do Karla thing We've part we to that. a where add just one company and pay selective. of already into there. be and talked worked that add the way think, companies about with of can you company our at particular our a own. world simply And or a you position we some look we do dip CapEx and well, But right. premium is buy in into already we fund We've equipment sometimes one a the

take pretty place into when is our look M&A So consideration but thought at you should be you It's our that good process. of activity. to that part

Sathish Kasinathan

is backlog, add construction, non-res given to second question you My to or on planning adding strong order cater additional even increased crews the are to the demand?

Karla Lewis

that. very So on the we're positive non-res and side, that's our market largest end on

non-res consistently equipment, processing continued operations, with also added expanding in We facilities. additional our value servicing invest to have

do the to take our a been volumes. good network earnings have, orders. add on we're very more mentioned think quality before, focused selective. we We've and capacity value So right trying We're current position. to do for in additional we in more we've as on high But

years. the passes that see a So in from more bill significant pickup non-res, there, positive the have comes these whether would which if infrastructure over consistently we do traditional for we capabilities be operations and have because us, the very invested we

Operator

comes question KeyBanc Gibbs Capital Phil Our next with from Markets.

Phil Gibbs

up far how doing, terms April, and the the quarter doing shaping saw to now, is Jim Just you into and in right keep cadence of Karla, whatever through March, that just demand April? progressed you're so in previous it's it, first has relative what environment listening for The working. the questions, how

Jim Hoffman

just -- changed market. giving specifics. just It's Phil, the you yes, We're calendars it the didn't continues. quarter not change because of

to So it's our mojo. still we're quote continues of it To working what friend a mine, do doing.

to have So we do quarter. continue another that, we'll

answer it your to continues. just question, yes, So

Phil Gibbs

Is Bill call at on the all?

Jim Hoffman

Bill? Yes.

Bill Sales

here. I'm Phil, Yes,

Phil Gibbs

commentary some in was space and defense backlogs. said being you the earlier with, solid call year There about this think, increasing even I

big you any happening, behind terms give of that? push could is major programs where In specifics the the

Bill Sales

for joint the strike that year then after the lot as activity look said, of one think balance support and side. But the activity And there's strong at when and is we program and larger just fighter a program, Well, of the level of to space outlook, strong. overall, should continue. you be military I the and that that, programs defense on we is continues that

on So of markets. downturn the it's to have with aerospace a had that bit that we some these offset commercial we've great in seeing little do other side deal the

Phil Gibbs

seeing Is in signs And the a a that that and as then is the well? oil inventory or domestic comment comment all some some of as that accelerate select replenishment. just that you progresses, something all year purely to that global and expect are is maybe and you on gas

Karla Lewis

and not in So type OCTG line product. on the where oil remember, participate, we the and or big gas side, too, we're

So wasn't folks and of it in any we again. to positive tried in huge activity. we make where it It's down areas a participate, good our activity increase, kind to smiling was the clear, see but Houston

growth, So repair on to we're the of new any domestic think probably some more opposed and maintenance it significant We that's pleased to see more as side. activity.

again, especially parts low up move through of seeing inventory. in better parts, again continue. domestic. as positive see rates Other slow of than do seen asking that quarter. while. coming we We levels held think that But that, us inventory there's has It we a of was the compared We're holes starting year. haven't still there. So our see in the there, to have that kind activity International, out moderate some plenty will some customers we at in certain the them for for quotes fourth to their

more steady from stayed that So standpoint. international an

Jim Hoffman

energy renewable well there good. in participate also as we and activity is the Phil,

Phil Gibbs

given swirling headlines semiconductor OE of outages. question, And then curiosity, the shortages just and last all out on

which on memory, through based in participate obviously aggressively You think lot tolling just time. that's your business, just in I automotive a of

So Just you terms if what seeing in the your there up, are because are you obviously and are Difficulty] things happen of [Technical of there's terms and of may to lot you out What telling these customers that of and impacts? flows swirling. of disruptions? trying a ebbs catch in what some terms understand in seeing

Bill Sales

the on in minimal saw we'll first in some QX. do quarter. But we see tolling slightly We a business up said, we impact that we're as more an of Phil, new picking side. the to really think impact

will be have. that programs I new some think partially we it by offset

see be point those from a to view. the on that more still the with are So we we profitable think an the the look you at and QX And do SUV it's guys. that auto impact more I focused of platforms overall an we'll platforms it's and little if going but truck minimal expect more of in you know support, programs

do. we losses be the Your think to soon they'll up we offset to point place. We of going Absolutely, up? do catch these of, chip back some ramp think in there's production as is try to some availability as

I So the OEMs impact working to of think that's those and all shortage. of focus I are a know the minimize hard

Operator

with next Our question comes [Operator Alex Instructions] Citibank. from Hacking

Alex Hacking

cadence? the Regarding at given I guess, any restocking think the COVID then do supply mean chain into industry the disruptions you it's back some what's when even mentioned levels seen there? you the everyone board I that you without demand else the guess activity Have above I XQ. would and you lease be going pre in COVID But disruptions, of on? that's look alleviation been has across levels And seeing. continuing pre you that

Jim Hoffman

I our crystal can what tell just ball you says.

are things types all of change, tendency a think all now. the just up. that work those they which so things themselves computer And And I as it other assuming don't that will ramping that. as the right out. a things work supply a and side, help matter with you're when chips it's sounds the far rubber, have metal should the in and mills those chain like freight existing I'm the good to all all On and are up, issues, referring that is to thing,

hopes they're suppliers are here -- Our well. it's thoughts long our a it's they to are shorter are our people mean that recognized very learned work is are, because And their that and and all has supply looking they're support don't chains supply good matter of and our decision we for domestic just will chain. have decades folks, it a Reliance I lesson. although

that. Karla, manufacturing hope is we're I've but great going which optimistic And some you the on like I more chip step. have a to that, learn production where United people some manufacturers to So bring sounds things States, certain better. about It may are are. some read and getting

Karla Lewis

the we first said There have that these would demand different disruptions. feel in is of a Alex, do and prepared we been And affecting underlying are some remarks, lot for our kind chain. QX. that strong quarter see that supply as we of not continuing of shipments stronger, we into factors that

except underlying on believe cadence we will we specifically hear there, be customers. to also talk strong from hard the we think it's but about is they demand what really that still do our that So based

jobs hear actually they like higher to Reliance, activity addition production actual own people In and customers shortages lot issue fleet of own that's and had labor that do manage levels. that rubber our chips be the things if to out are shortages. there. freight that and the of they at We also there of trucks. qualified with there's fill a remember from would we Also, the because like our that,

real us markets a all the that's in in think this, markets, we advantage So including but for in one. current like

a see confident and pressures we're of some locations little well. to on but try quarter. into second mills can getting continuing rely into those deliver advantage third our very metal bit parties our with creative that's looking closely lot a as at domestic that we do There's the we to to we with think where solutions a of work more an we more. we help our customers. difficulty So But are very of a But

Jim Hoffman

expensive. quote I think is that lesson really cheap on this a the good is

this around. are learning people Again, that. think time I

that fingers people keep time. let's remember So our will at all crossed this

Operator

I will have and over for end the session, call to We Hoffman, the now closing the Jim turn reached CEO, remarks. of question-and-answer

Jim Hoffman

call to Thanks today all for of on the and you Great. your time attention.

We’re of well strong hard which financial being to have our commitment XXXX. thrilled the and our the of operational contributed achievements the quarter health, been execution Reliance field. relentless possible work entire colleagues the to in with in would which team, the None record without of the first by demonstrated safety and

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