Good morning, ladies and gentlemen, and welcome to our 2023 year-end and fourth quarter results conference call for Russel Metals. Today's call is being hosted by Martin Juravsky, Executive Vice President and Chief Financial Officer, and John Reid, President and Chief Executive Officer of Russel Metals. Today's presentation will be followed by a question-and-answer period. At any time, if you have a question, you will need to press star one on your telephone keypad. I will now turn the call over to Martin Juravsky, CFO, and John Reid, CEO. Please go ahead, gentlemen. Great. Thank you, operator, and good morning to everyone. I plan on providing an overview of the Q4-2023 results, and if you wanna follow along, I'll be using the slides that are located on our website. All you just need to do is go into the Investor Relations section. It's located in the area called Conference Call, and you'll find the slide there. If you go to page three, you can read our cautionary statement on forward-looking information. Let me start with a little bit of a perspective and context around 2023. First of all, I wanna thank the 3,500 people that are part of the Russel family. The team effort has been truly exceptional, and we are very proud of how the group came together and delivered, not just in 2023, but over the last number of years. Second, I wanna thank our shareholders for granting us the patience as we implemented a series of initiatives over the past few years. It probably sounds like a cliché to say that we are focused on advancing the business for the long term, but we tried to be very targeted in how, when, and where we deployed capital. If we look at 2023, our safety record is the best in our history, and we were recently recognized with an award by our industry peers. There's a robust pipeline of internal investments, with some projects being completed in 2023 and many more in progress for 2024 and beyond. This pipeline of projects has targeted value-added equipment and facility modernizations, and that pipeline is now the largest backlog in our history. We announced the Samuel acquisition, which is expected to close in Q2. This acquisition was a long time in the making and would position our business well in Western Canada and the U.S. Northeast. We also completed a small tuck-in acquisition within our energy field store business in Q4. So let me start with page five and begin with a little bit of a discussion around market conditions. So after some volatility with sheet prices in Q2 and Q3, both sheet and plate were relatively steady in December and January. That being said, sheet prices have declined somewhat over the past couple of weeks. When we look at both benchmarks today, there are a few interesting observations. The absolute prices are at levels that are higher than in previous cycles because of good demand, a higher cost curve for producers, as well as better discipline by producers. The current spread between sheet and plate is making more sense than it had over the past few years. We saw periods in 2021 where sheet was, in fact, higher than plate, which is a bit of an anomaly. We also saw periods where plate was CAD 700-CAD 800 per ton higher than sheet, which is also an anomaly. The current spread is more reasonable compared to historical spread levels. You can see from the right charts, in terms of inventories within the service center supply chain, that the industry remains at reasonable levels for inventory, at the same time, that demand is solid. On page six, we have a snapshot of our results. 2023 was the third-best year in our history from a top-line, bottom-line, and return perspective. We generated significant free cash flow and have the strongest capital structure that we've ever experienced, and that gives us a lot of flexibility to pursue a range of opportunities. If we look across the various charts, going from top left, revenues were CAD 1 billion in the quarter versus CAD 1.1 billion in Q3. EBITDA was CAD 82 million, and EBITDA margin was 8%. Both of those were down from Q3, but without the Q3 contribution that came from TriMark, the Q3 and Q4 results would have been very similar from an EBITDA, EBITDA margin, EPS, and return perspective. We think there's a very good outcome, as Q4 is typically impacted by seasonality. Our annualized return on investment capital came in at 19% for the quarter, and our total for 2023 was 25%. When I mentioned our financial discipline and focus on returns, I think the bottom middle chart illustrates how we have delivered over an extended period of time. Our target is over 15% through the cycle and to be first quartile in the industry. The portfolio changes that we've experienced over the last number of years have led us to achieving these goals. Lastly, in terms of capital structure, you see that on the bottom right-hand chart. We have net cash of CAD 332 million versus net debt of almost CAD 500 million at the end of 2019. This capital structure shifts, as I said earlier, gives us a lot of financial flexibility going forward. If we go to page seven, there's some more detailed information on our financial results. Just starting at the top of the page from an income statement perspective. I covered several of the high-level items already, but a few other items to note. As I said earlier, revenues of CAD 1 billion for the quarter. It was down 8% from Q3. Price realizations were down a little bit, and we had a small decline in service center volumes. On margins, all segments were up by about 100 basis points, and I can discuss these in more detail in a few minutes. Interest came down to CAD 1 million for the quarter as we are generating interest income on our growing cash reserve. Our Q3 results were impacted by a few non-operating items. TriMark, we picked up CAD 12 million in Q3, but had nothing in Q4, as our interest in TriMark was sold in early September. Stock-based compensation was CAD 7 million for the quarter, due to the increase in our share price in the quarter, and we had a CAD 3 million increase in our inventory and NRV reserves. Going down to the middle of the page, from a cash flow perspective, in Q4, we generated CAD 82 million from working capital, primarily driven by a reduction in inventory and AR, which was somewhat offset by a reduction in accounts payable. CapEx of CAD 28 million was higher than in the past couple quarters, as the pace of our various projects is picking up some steam. The 2023 CapEx of CAD 73 million is in line with the CAD 75 million that we had expected for the year. Going forward, we expect our 2024 CapEx to be over CAD 100 million, as there are additional value-added and modernization projects that are coming, that are coming through during the next twelve months. From a balance sheet perspective, we are a net cash position of CAD 332 million. This is a CAD 60 million improvement in the past quarter. Our liquidity is over CAD 1 billion, and we have the strongest balance sheet that we've experienced, as I've mentioned earlier. We managed the company with a conservative bias, and we've demonstrated this approach through market volatility. One item of note is the Canadian dollar did strengthen in the quarter, which did have a negative impact on our OCI account in translating our US-based financial results from US dollars to Canadian dollars. In the quarter, we picked up 390,000 shares under our NCIB, which brings the total to 3.2 million shares since we put it in place in August 2022. Our average purchase price to date is CAD 34.65. Our book value per share remains north of CAD 27 per share, notwithstanding our share buybacks in the quarter. Lastly, we declared a quarterly dividend of CAD 0.40 a share. If we go to page eight, we have our EBITDA variance comparing last quarter to this quarter. Starting at the left, if we look at the service centers, the volumes were down a little bit compared to Q3, but our margins were up a little bit, and we also benefited from a CAD 4 million variance related to a reduction in our operating costs, which is mostly variable compensation. Towards the middle of the page, energy field stores were down on an EBITDA basis, as Q4 was impacted by some seasonal slowdown in our U.S. business, and because Q3 included some lumpy projects at one of our Canadian divisions. Steel distributors was up CAD 3 million due to good business activity and lower costs. There was a CAD 13 million unfavorable variance in other. As I said earlier, in Q3, we had a CAD 12 million pickup from the TriMark component, and obviously, there was nothing in Q4 because it was divested. We had a slight decline in our Thunder Bay Terminals operation, and there was also an additional expense related to the mark-to-market on our stock-based comp. As a favorable variance, excuse me, other expenses came down by CAD 4 million in the quarter. If we go to page nine, there's our segmented P&L information. For service centers, revenues were down, but both margins and EBIT were up. I'll go through more detailed metrics on the service centers on the next page, but our overall results were very good in what is typically a weak quarter. In energy field stores, we are continuing to see solid performance. In Q4, revenues were down versus Q3, with some seasonal dynamics that I talked about before, particularly for our US operation. Margins did come up a bit as a reminder, and as I said earlier, one of our divisions moved some volume in Q3 for project work. That was a below-normal margin, which is why our Q4 revenues were down a bit, but our margins were up. Steel distributors segment revenues were down slightly, but margins and profitability were better than Q3. On page 10, there's a deeper dive on some of the metrics for our service center operations. Top right graph is volumes for the last number of years. Q4 2023 volumes were good. They were down 1% versus Q3, but given the seasonal comparison, if you look compared to Q4 of last year, they were up 5% versus this time last year. Bottom left graph, we have the revenue and cost of goods sold per ton. Revenue per ton, our price realizations decreased by CAD 114 per ton versus a CAD 115 decrease in cost of goods sold, which resulted in a slight pickup in margin per ton, that is shown on the bottom right graph. When we look at operating results over the past number of months, five, six months, the margins were declining on a month-over-month basis as prices were coming down and we were working through the lag effect of some higher cost inventory. This downward margin trend reversed towards the latter part of Q4. So our margin profile was better at the end of Q4 than at the beginning of Q4. For Q4, our gross margin was CAD 443 per ton, which remains at a pretty good level compared to the historical levels, which were closer to CAD 300 a ton. As we've said many times in the past, our initiatives that are related to the value-added processing equipment and the other investment profiles that we have should lead to higher average margins and lower volatility over the cycle as compared to our legacy margins. On page 11, we have the illustrated inventory turns. The chart shows turns by quarter for each segment, energy in red, service centers in green, steel distributors in yellow. In addition, the black line is the average for the entire company. Overall, our inventory turns declined from 4.0 at September to 3.8 at December 31. This is typical at this time of year, as our Q4 turns do come down a bit with the pullback in shipments in the last few weeks of December. That being said, the 3.8 for Q4 of this year is better than we normally see in a typical Q4. By sector, our service centers were 4.4 turns, which is again, industry leading. Our energy field stores came down to 2.8, but that should improve in Q1, while our steel distributors improved from 3.2 to 3.5. On page 12, I have the impact of the inventory turns on inventory dollars. Total inventory declined by CAD 43 million, with a small decline across all three segments. In service centers, we had a decline in prices that more than offset a small increase in tonnage. This is consistent with our expectation that I mentioned a number of months ago on our Q3 call. On page 13, we have the overall impact on capital utilization and returns. Our capital deployed came down to CAD 1.3 billion because of our working capital reduction in the quarter. More importantly, our returns continue to be industry leading. As mentioned earlier, our 2023 returns on invested capital was 25% for the year. If we go to page 14, I provide an update on our capital structure. The continuation of the strong free cash flow gives us a lot of flexibility. On the left table, our cash position went up to CAD 629 million, which is a CAD 60 million increase versus September, which and it's also a CAD 266 million increase since this time last year. Our equity base remains over CAD 1.6 billion, and the chart on the right shows that our book value per share remains over CAD 27 per share, which is over CAD 2 increase since this time last year. On page 15, we have an update on our capital allocation priorities going forward. Given our strong balance sheet, we continue to have a multi-pronged approach across all of these bubbles that are on the page. For investment opportunities towards the top left of the chart, we seek returns over the cycle greater than 15%, as I've already discussed, and we've delivered well above that target. The ongoing opportunities are threefold. We are continuing to identifying and pursue additional value add projects. In total, we have over 40 equipment projects on the go right now. Facility modernizations, we have five projects underway. They are tracking for completion at various times in 2024 and into early 2025. In total, our CapEx was CAD 73 million for last year. As I said earlier, we expect that number to go up to over CAD 100 million for 2024, as our project pipeline is currently over CAD 200 million. That's a multiyear number as we continue to identify more and more opportunities. In terms of acquisition, we looked at a lot of deals over the last couple of years. In Q4, we closed the acquisition of Alliance Supply, which is a small tuck-in for our Canadian energy field store business. In addition, the Samuel deal is expected to close in Q2. In terms of returning capital to shareholders, the bottom part of the page, we've adopted a flexible and somewhat more balanced approach. For dividends in May, we increased our dividend to CAD 0.40 per share per quarter, and we'll continue to reevaluate the appropriate level on a regular basis. For the NCIB, we acquired 390,000 shares in the quarter, and since August of 2022, we acquired 3.2 million shares at an average price of CAD 34.65. We expect to continue to utilize the NCIB on an opportunistic basis. If we compare the 2023 activity of our NCIB versus dividends, the dividend run rate was around CAD 96 million versus CAD 82 million in share buybacks for last year. So we are close to a balance between the two forms of capital repatriation. That, that 50/50 frame of reference is not a hardwired target, but it's a good litmus test to see if we're being somewhat balanced. On page 16, I want to provide a context around the cumulative impact of the actions over the past few years. In total, we generated CAD 1.7 billion worth of cash, with CAD 1.2 billion coming from operations, CAD 400 million coming from asset sales, which is mostly the monetization of the OCTG line pipe businesses, and CAD 35 million from option exercises. If we compare that CAD 1.7 billion on the left to the capital redeployment on the right graph, it is split into roughly three equal buckets. In orange are our reinvestments, which in total is just under CAD 600 million, and it includes CAD 181 million of completed acquisitions, CAD 225 million for the pro forma impact of the Samuel transaction, and CAD 170 million for internal CapEx. The blue part, excuse me, totals around CAD 500 million, which was the capital return to shareholders through both dividends as well as the more recent initiative under our share buyback program. The last bucket is in green, which is around CAD 600 million in debt reduction, cash buildup, which provides us the financial flexibility that I've mentioned earlier. Again, when we look back at this, it just provides an interesting frame of reference of the amount of cash that's been generated, the cash that's been redeployed in very similar buckets, about a third, a third, a third. Also, it's interesting to note that when we look at the asset sales of around CAD 400 million, that is roughly the equivalent of the amount that has been invested through acquisitions and in the announced acquisition. So it comes down to a situation of trying to do more with effectively the same amount of capital, just better capital redeployment, and you see that on page 17. The top left is investment capital, and it has averaged around CAD 1.3-CAD 1.4 billion over the last decade. But the biggest difference is that we reallocated our capital away from some underperforming businesses... and reinvest it in our core business. The result is we are doing more with the same amount of capital. Bottom left chart shows returns, which are, at the higher tier over the last couple of years than they have been in the past. On the top right is EBITDA margins. We've consistently said that one of the outcomes of our actions should be to raise the floor, raise the ceiling, and reduce the volatility through the cycle, and you can see some of that result being demonstrated over the last couple of years. By comparison, there were some tough times in the past, 2015, even the front end of COVID of 2020. The sustainability of the business and financial performance is different than it has been in the past, because of some of those initiatives. The net result is somewhat illustrated also on the bottom right graph, which is our book value per share. We've been an elevated baseline and are in a pretty good position to continue to grow through the cycle. In closing, on behalf of John and other members of the management team, I'd like to express our appreciation to everyone within Russel. Thank you to everyone across the company for your contributions. That concludes my introductory remarks. So Operator, if you'd now like to open the line for questions, that would be great. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to remove yourself from the question queue, you will need to press star two. If you're using a speakerphone, please lift the handset before pressing any keys. Please go ahead and press star one now if you do have any questions. Your first question will be from James McGarragle at RBC Capital Markets. Please go ahead. Hey, guys, congrats on the strong results. Great. Thanks, James. Hey, just looking at the results, sequentially at your service centers, you know, we've seen steel prices up significantly versus the lows from last year. You pointed to higher volumes quarter-over-quarter. So how should we be thinking about sequential trends, you know, in particular on the gross margin side, given the higher pricing and the focus on value-added services, kind of within the context of your historical seasonality? Yeah. Well, I think without being too short-term focused, that this is more a function of what does the trend line look like? You know, I think we've, you know, tried to be consistent in saying that these initiatives should add a couple hundred basis points on average over the cycle. Now, the cycle does move around a little bit, and sometimes it gets more pronounced than others. But overall, it should be a couple hundred basis points of impact through the cycle. Now, that being said, we just happened to have had a couple pretty good years from a cycle perspective. But even when cycles turn south, and even with the volatility, and they have turned a little bit south from time to time in 2023, we still demonstrated some pretty good results, as evidenced by the margins that we that we had in Q3 and Q2, where there was some softening in pricing. So overall, you know, James, if I to to get to your question, the initiatives over the course of time should add, on average, a couple hundred basis points to our results. Okay. And then, another one on some of the recent CapEx spend. This is a two-part question: So, you know, you alluded to potential share gain from some of those initiatives, and, you know, what's the opportunity set, kind of, if we look longer term in with regards to share gain? And then onto the uptick in CapEx from prior guidance, is this a pull-forward spend or additional spend? And can you comment a little more specifically on what you saw in the market that kind of prompted that increase in CapEx spend? And after that, I can turn the line over. Thank you. Sure. Thanks, James. So why don't I answer the last question first, then John can deal with the first question in terms of the market. In terms of CapEx, it's not so much a pull forward. What we have is sort of an evergreen list, and it's the backlog of projects in the go, and it's constantly getting updated every day, every week, every month. And the timing is a little bit imprecise, but it effectively is a multi-year plan. And then in terms of the specifics of when certain things come to fruition, it's a function of lead time in certain equipment. In some cases, it's readiness of certain facilities. In some cases, it's both equipment as well as buildings, and buildings could sometimes be driven by permit requirements. So it's not so much we pulled stuff forward. It was really a function of there was an evergreen list that we always have, and this is just what that 12-month window between January 1 and December 31 looks like. But we tend to get more focused on the evergreen list, that is a multi-year evergreen list. What we've said, though, over, is that we expect it to be north of CAD 75 million per year on average, and 2024 is gonna be one of the years that's a little bit above average. Yeah, James, to your first part of the question on share gains, a lot of the share gains are actually coming directly from the end user customers. And so where they had bought the steel in the past from us or someone like us, and then that steel would be processed in their plant, and it may have two, three, four processes done. With this value-added equipment we've now installed, we're able to bring that in-house and do that for the manufacturers or end users to where they can free up that space, free up the time and the working capital. And we're able to do that with a typically at a more competitive price because it's not a multi-step process where we just have some more sophisticated equipment that can do all those in one step. So that's where the majority of the gain is coming from. And so that, we feel like we'll continue down that road as we're seeing this just kind of evolve into the next step of things people are wanting us to do. Did you have any further questions, James? Oh, no. Thank you very much. I'll turn the line over. Thank you. Thanks, James. Next question will be from Michael Doumet at Scotiabank. Please go ahead Hey, good morning, guys. Hey, Michael. So on the topic of capital deployment, you know, you've invested a lot of growth capital, Marty. Good presentation there, just to connect the dots on what you've done in the last three years. I guess the issue is that in the last three years, you've managed to outearn what you've spent. So I'm thinking maybe longer term here, what your thought is on the optimal balance sheet for Russel Metals, leverage targets, you know, what you strive to get to longer term as you continue to invest? Yeah, it's a good question, Michael, because at the end of the day, you're right. We've built a really strong position. Some of it was by design because of the initiatives that we did, and some of it was being in the right place at the right time, as the cycle turned very favorably. Building dry powder is a good thing because we don't have the crystal ball on how cycles evolve, but having that flexibility is extremely important. So obviously, we've got tremendous flexibility right now. You know, it this is probably more of a philosophy than hardwired numbers attached to targets. But, you know, the philosophy is, we want to maintain good flexibility at all points in the cycle, so that we can always be in a position to take advantage of opportunities that are presented to us, 'cause we don't know what's presented to us. And so what that means is, yeah, we're sitting on a position today that's net cash. That's not the long-term plan, but at the end of the day, we do wanna have a philosophy that gives a tremendous amount of flexibility to seize on opportunities. You know, when we look at historical metrics, there's frames of reference of, you know, there's been times you can do 30% net debt to invested capital. We can do something like that within the frames of our liquidity today. But it's not so much a hardwired target, as it is more of an overall frame of reference of maintaining strong liquidity at all parts of the cycle, so that if the cycle turns up, we do certain things, if the cycle turns down, we do different things. And so that liquidity flexibility is more of a qualitative underpinning than a hardwired number. It should be this or it should be that. That's perfect. I really like the answer. And then maybe just switching over to the numbers here. So steel distributors, 2023, pretty outstanding year. Maybe if you can break down, John, the reasons behind the outperformance, especially into Q4. And then just wondering, you know, as we think about 2024, the overall sustainability of the margin profile. Yeah. So, very, you know, astute acknowledgment there on steel distributors, and primarily driven as in Q4, and really throughout the year by our Canadian steel distributors. And again, we've typically done back-to-back contracts. As the market, you know, moves up and down in price, they'll lock in, sell back-to-back. They had an opportunity and some windows this year to do some more transactional, things that were in favor, just due to the market and available tonnage that was brought to us from suppliers, so they were able to take advantage of that opportunity. But, overall, again, I think, that gave them some margin windows that aren't typical. So I think we'll go back to a more normalized margin that we've seen historically in 2024 for our steel distributors. Our U.S., again, is highly transactional. It had an average year for them. They'll be probably stronger in 2024, so there'll be some balance in there, but as far as their gross margin profiles, I think it'll be more historical. Perfect. That's it for me. Thanks, guys. Great. Thanks, Michael. Next question will be from Davis Baynton at BMO Capital Markets. Please go ahead. Hi, good morning, this is Davis on for Devin Dodge. Hey, Davis. Thanks for taking my question. Regarding the Samuel acquisition and expanding into the Northeast, how quickly can Russel add scale to that region? You know, it's some of it's out of our control because it's a function of opportunity. And we don't want to hardwire targets or hardwire timing because it would kind of force the wrong situation, perhaps at the wrong time. You know, just to kind of, you know, Davis, to peel back, you know, John, I've lost track of how many acquisitions we've looked at in the last number of years, probably close to 100. And so building scale is not hard. Building quality businesses that fit financially, fit culturally, fit operationally, that is hard. And so we don't have hardwired timelines or targets to say we need to be of a certain size in certain regions at various points in time. We're just gonna continue to be opportunistic, and we think that that is a region where we actually have some operations already in Wisconsin. The two locations in Pittsburgh and Buffalo for Samuel's are a nice extension of that. So we actually do have a good platform, and we'll be opportunistic as new situations present themselves, and if they don't present themselves, we're not compelled to grow in that region, where we've got good scale for what we have. If there are better opportunities, terrific, and if there aren't the right opportunities, we've got a good platform as it currently stands. Okay, great. Appreciate the context. Then switching gears maybe a little bit here. Are your five facility monetization processes still expected to be completed in calendar year 2024? Yeah, mostly in 2024. A couple might spill into early 2025... Great. Thanks, Davis. Next question will be from Jonathan Lamers at Laurentian Securities. Please go ahead. Good morning. Hey, Jonathan. Yeah, thanks for the commentary on the share gains in Q4. So, I mean, just to circle up on that, the volume growth was pretty good in Q4, at just over 4%. So am I understanding correctly that that was mainly in Canada with the transactional items in the market, and also some share gains on the value add initiatives that, that John discussed? Yeah, and I think Michael was asking specifically about steel distributors only. So if you're looking more broadly across the service centers, I think is what you're touching on, on the share gains based on the percentages you gave there. So again, those were, again, different. That was, that was driven by the value-added initiatives that we've done primarily that are out there. So again, two, two different segments to our business. I think you may have blended the two together. Right. Okay, thanks. I was just wondering if you could give us an example of one of the value add initiatives where you've seen success that's allowed you to, you know, gain share with your customers and/or turn inventory faster. I think it's kind of underappreciated that you're leading the sector in terms of inventory turns for the MSCs, and would just like to, you know, understand that a little better. Yeah. So just a couple, without getting too granular on specific, you know, we were a big beam inventory player. We put in a beam line that allowed us to go in, and now we're actually taking those beams where our customers that were in fabrication, we're doing a value-added downstream that may include, in a project of scale, maybe a CAD 1 million project, CAD 1.5 million, we're now adding a component of a couple hundred thousand dollars of labor margin to that, by being able to do that on that line within a monthly period. That would be one project. So with, again, as Marty said, over 40 underway, probably well over 100 completed, we're seeing that in each and each individual location happen over and over again. So we've become now not just a commodity supplier to our customer, but we're a value add extension of them, where they can go out and take on more additional work if they don't have that capacity in their shop, or if they do not have that process, it gives them an avenue into that. So it allows us to go out and do that without, in a lot of cases, without adding to our inventory profile, because we're just adding the labor component. Thank you. Marty, on the acquisitions, you mentioned you looked at close to 100 last year. For the ones that you're saying no to, are there any, you know, common reasons why you'd be saying no? Is it valuation primarily, or, you know... How much higher do you find that the margins for your service centers are versus the targets that you see? The 100 was not last year, it was over a couple of years, but regardless, it was a big number that we looked at. In terms of reasons, it's all over the map. Some of it is valuation, and within that 100, there were some deals that came back to market multiple times, and we had issues, not just the first time, we had issues the second time, or in some cases, the third time when they would come to market. Sometimes it is valuation, sometimes it is cultural fit. There's some things that are non-negotiable in terms of things like safety, and obviously there are situations where you can bridge from legacy safety cultures to what our standards are, and sometimes you can't. Sometimes there's entrepreneurs who have run really successful businesses, but wanna leave, and is there a backup plan in place behind them? So, there's a whole variety of reasons, and I wouldn't pinpoint to saying it's only one item. It is really a whole series of things that are important criteria to us, which is why we tend to be fairly selective. Apologize if I missed this. On your CapEx plans for 2024, which include over CAD 100 million, do you have a breakdown for how much of that would be for the Samuel's integration? How much would be for value add, and how much is maintenance CapEx? Yeah. So the maintenance CapEx component of that is probably CAD 30 million, CAD 35 million ±. So the balance of it is discretionary. And so that goes, kind of, go back to the core pieces of, you know, the value added projects, you know, the things that John was just talking about as examples, as well as those facility modernizations. So, you know, about two-thirds of that is discretionary. How are you thinking about the dividend and the NCIB here? You know, given the share price has recovered somewhat, but the stock still looks compelling on valuation now that you're, you know, flush with cash, and will be busy with integration on Samuel's as far as large acquisitions go. Yeah. So in terms of dividends, we made the dividend increase from CAD 0.38 per share per quarter in May to CAD 0.40 per share per quarter, and we'll continue to revisit on a periodic basis. I can't tell you exactly what the period is gonna be. But it's something that we'll probably revisit more actively on a go-forward basis than had been done over the last number of years. It's hard to completely forecast what that would look like, but it'll probably be a periodic reassessment. On the NCIB, it's opportunistic, and in some ways, it's the sort of same circumstances as M&A. M&A is opportunistic. We're not interested in doing everything that is available out there from an M&A landscape. By the same token, there's times we'll be more active or less active on the NCIB. There are certain price points we'll be more aggressive than others. And so we've tried to articulate it as an opportunistic approach to the NCIB, and I think that's gonna just continue to be the frame of reference. Thanks for your comments. Great. Thanks, Jonathan. Next question will be from Michael Tupholme at TD Securities. Please go ahead. Thank you. Good morning. Hey, Michael. Hey, maybe just to pick up on one of those last questions. Just regarding the dividend, Marty, you mentioned you'll expect to continue to reassess periodically. Is there a payout ratio you have in mind that we should be thinking about as we try to think about how the dividend may evolve over time? The short answer is no. It's not viewed that way, that we've got a hardwired dividend ratio that we're gonna do a recalibration on every quarter, every year. It's looking at things more holistic than that for a whole variety of criteria. So I wouldn't wanna sit here and say we've got a hardwired formula that you can plug into a model. It's not the way we've looked at it recently, and it's probably not the way we're gonna look at it on a go-forward basis. Okay, that makes sense. As far as the quarterly performance for service centers, we did see gross margins improve quarter-over-quarter in the fourth quarter. I know you commented earlier about how we should think about sort of gross margin improvement potential over time, given the value-added initiatives. But in the short term here, just given the way steel prices have moved, you know, we saw them move up through the early part of this year, and then, I guess recently, there's been a little bit of a check back. Can you just help us think about Q1 service center gross margins versus Q4, just given kind of the movements we saw in Q4 in steel prices and kind of what we've seen so far this year? Just 'cause, again, it, it's sort of rising and then, and then now falling a little bit. So just trying to understand where that leaves us for Q1 versus Q4 service centers gross margins. Sure. Well, your, your last observation is spot on. They do move around, that is for sure. And I, I think overall, it kind of underpins another point, which is there is still a cyclicality attached to this business, and we pay attention to that a lot. We don't predict it, we don't control it, but we recognize that it's there, and we try and adapt to it. So part of the dynamic attached to margins is also just the lag effect between prices changing on product and incoming inventory that may be committed to, you know, a couple months in advance of actually product going out the door, and that whole lag effect of how it flows through. Which is why on a very short-term basis, usually measured by a couple of months, you often do see times where, you know, top line might be going up, bottom line might be, cost of goods sold might be coming down or vice versa, and that translates into dynamics with margins. Q4 was a little bit of that because, you know, there's a, there's a point where we actually saw, you know, pricing coming down. Actually, Q3 and Q4, pricing coming down, but cost of goods sold was coming down more on a lag effect basis, so they weren't working in symmetry. What that ultimately meant for us, is that when you break down Q4 into its components, margins picked up in December versus what they were in October or November, and that kind of the level that's maintained itself into January. So the January level is kind of similar to December, and December was a little bit higher than it was in November. So where we are right now, all of the things being equal, the January level is probably sustainable, which is a little bit higher than it was coming into Q4. But there's obviously, as you point out, some moving pieces in terms of steel prices. So it's hard to be too predictive, but at the end of the day, it was a better story coming out of Q4 than going into Q4 from a margin perspective. Okay. Well, thank you. Can you provide an update on where things stand in terms of the approvals for the Samuel Service Centers acquisition, and what key items are still required to achieve before closing? Yeah, so there's a whole variety of things that are taking place in terms of planning and readiness and all that, and we're spending an awful lot of time. There's a lot of IT elements attached to coordination. There's a lot of people elements attached to readiness, a lot of back office elements attached to that. There's ongoing dialogue with the regulators. So it's really a multipronged approach, and there's a lot of resources that are going into it. It's a carve-out from an existing company, so there's complexity attached to that by definition. There's locations in various locales. So there's a lot of components attached to kind of going from concept, going from an agreement to closing, which is why it takes a little bit of time. There's a whole variety of those things taking place in parallel right now. Okay. But Q2 is the expectation for closing? Uh, correct. And you were asked million include what you intend to spend, if anything, in the context of the Samuel acquisition and whatever you plan to do once you do close and in terms of any value-added related initiatives? Yeah, like, well, let's put it this way. The hundred million dollars, what I said is pro- is greater than a hundred million dollars. So whatever needs to be done in terms of Samuel's, that by definition would be inclusive in it. But we don't know enough right now to know exactly what we would wanna do. And to be more specific too, from a timing perspective, there's a lead time associated with doing any kind of investment. So if we wanted to do something within our existing operations today, there's a lead time to the planning, there's a lead time associated with an approval process, there's a lead time associated with the equipment. So for all intents and purposes, it wouldn't be a big dial mover element in 2024 anyways. Okay, makes sense. And then just regarding the energy field stores, I don't think there's been a lot of discussion on this call about that segment, but the outlook commentary you provided in the release sounds fairly constructive as it relates to that segment. Through the first part of this year, at least, we have seen looks like North American rig counts are down versus last year. I'm not sure they've changed much sort of sequentially, but just on a year-over-year basis, they're down a fair bit, maybe more so in the U.S. than in Canada. We've obviously seen some natural gas price weakness of late. I'm just wondering how you're thinking about that business for sort of full year 2024 versus last year. Is this a business you think you will see growth in, in 2024? And if so, where is that coming from, or how you're thinking about it would be helpful to better understand. So for the broader industry, I think it's fairly flat. We'll see a little, maybe a little bit of a bump in Canada with some of the large projects that are starting to come to fruition. But we're pretty bullish on that we're taking share on both sides of the border right now, and that's where we saw our growth, last year, and so we'll continue to see that, and we think we'll continue to grow share, both in Canada and the U.S. Okay, got it. I will leave it there. Thank you. Thanks, Mike. Next question will be from Ian Gillies at Stifel. Please go ahead. Morning, everyone. Hey, Ian. Is relative to three months ago, when you do the bottom-up analysis through your various operating jurisdictions, is sentiment better or worse from your customers and I guess your, your operators? When we're looking at specifically at one division, or are you talking about each one? Yeah, sorry. Sorry, I apologize, and that's specifically for metal service centers. Okay. Yeah, metal service centers, it's interesting. Demand is pretty flat overall. What you've seen is the interest rate sensitive projects that are out there, or maybe industries that are out there, they've obviously pulled back a little bit based on what's going on with the increased interest rates. There is some anticipation they'll take back off as interest rates start to roll over and come down. But overall, we've seen a very steady demand. Our tonnage is very steady. We're seeing price fluctuations up and down, so there's some sensitivity there. But we're at a very, very healthy pace right now for our industry when you look back historically. Again, third best year ever, and we're holding that type of rate right now, so we're pretty bullish on our service centers. And John, I suppose to follow on from that, and I know it's incredibly hard to tell, but do you get the sense yet of whether you're seeing any demand pick up from whether it be the IIJA, the IRA, or any of these various government bills? Or do you think that ends up being a net tailwind as we move through the middle and maybe back half of this year and into 2025? Yeah, I think we've seen a little bit and it's, but it's not the huge tailwind that maybe the media had portrayed it as early on. But I do think we'll see that in mid-year and late year. With it being an election year, it'll get pretty interesting, especially with the U.S. election. So, that could get delayed a little bit, but we are starting to see things move forward. It's out of the ground now, and so we're starting to see things leave the planning process and go to the procurement process for some of those projects. Okay. And on the pricing side, I mean, we tend to spend a lot of time focusing on HRC and plate, but there's a pretty large chunk of your book that isn't really either of those two products. What are the prices in those other products that are harder to find? Are they a bit stickier? Are they holding in a bit better? Like, how should we be thinking about those? Yeah, and so, we do spend a lot of time focusing on HRC and plates. You're exactly right. Some products, again, that's the base substrate metal for them. So if it's tubing pipe, those things are coming from a substrate, so they're driven by it. The others are more sticky and less volatile. So if you look at your traditional bar stocks, your beams, angles, channels, valves are a highly engineered product if you shift over to energy. So in our energy field stores, flanges, fittings, so those are highly engineered, so they just don't move as much. There's not as much raw material to move there or commodity item to move. No, you're exactly right. The others are more sticky. The nonferrous, we will see movement in, based on the indexes that are out there and the, the input coming in. So it has more volatility as well. And as we continue to grow that initiative and get larger in nonferrous, we'll probably start to talk more to that pricing as well. Okay, that's helpful. As you think about the facility modernization products, projects that are ongoing, I presume you've embedded those in growth capital. So can you maybe talk a little bit how you're gonna generate returns just from upgrading facilities and the like? ... So there, there's two real avenues that are there when we're upgrading facilities. One is just modernization efficiencies. And so if we've got, you know, some of our facilities are older, a little bit antiquated, but as we come in, we'll come in with better equipment as well as expanded facilities that allow us to, again, improve efficiencies through our warehouses and handling. And then the additional space also allows us to grow in the value add space to add equipment. Plus, now we can take on additional share sales that are out there. So if we're growing, we may be running at capacity at a facility now. By doing this, it'll allow us to expand further. Okay, that's helpful. Thanks very much. I'm gonna turn the call back over. Thanks, Ian. Next question will be from Maxim Sytchev at National Bank Financial. Please go ahead. Hi, good morning, gentlemen. Morning. Good morning. Most questions had been asked already, but I just wanted to try maybe to ask a slightly different tack in terms of visibility, because one of the things we've heard is that as steel pricing was kind of rising throughout Q1, there was a bit of a slowdown in terms of the pace of you know, whether inquiries or maybe less kind of inventory restocking. I'm just curious to see what you guys are seeing on the ground and whether that's a bit different in your universe. Yeah, any comment would be greatly appreciated. Thanks. Yeah, so we did see steel pricing going up, you're right, into Q1, and we've seen it roll over now, and you can see some of the indexes are starting to roll over. Inventories for our industry, as far as the service center, we're at a very good level. And what I mean by that is that, you know, we weren't too high, weren't too low, so they're turning at a very normalized level. So you're not gonna see pricing pressure from one side or the other, from it being either too low, or too high. The mills are running at a capacity level around that 75%, 74%, which is very healthy for the mills. So again, on all those levels, I think we're in pretty good shape going forward. We are seeing that steady demand out there. So again, if this is a steady state that we're in right now, we'll just see pricing fluctuations based on raw material inputs from scrap, and then any up or down will have an effect. But right now, it looks to be a very steady state for us in the first quarter. Hmm. Okay, that's super helpful. Thank you. And Marty, just because you made a comment around, you know, sometimes cost of goods sold, obviously moving in the opposite direction to, in the short term, in terms of the revenue. But in terms of what you have in your inventory and what's gonna be flowing through the COGS, do you mind maybe commenting a little bit on directionality? How should we be thinking about this? Yeah, most of that, if steel prices didn't move, and they will, but if they didn't move for the next couple of months, we've probably seen that lag effect already factored in to our cost of goods sold. So some of that dynamic that I was talking about before, where prices were moving around, prices were coming down, but our cost of goods sold were still going up a little bit, and the reverse has happened. It's kind of... All other things being equal, that lag effect has worked itself through our inventories and into our cost of goods sold now. Does that get to your question, Max? Yeah, absolutely. Yeah. So I guess like a bit of stability, assuming things kind of stay as they are, which- Right. Okay. Okay, I understood. And, and then just, just last one, I mean, like, obviously, it's an election year in the U.S., I guess, any chance of Section 232 being potentially removed, I guess, highly, highly unlikely from, from your perspective? Yeah, I think both sides need 232 right now. Again, with Pittsburgh being sorry, Pennsylvania, I'm sorry, being a swing state, I think they're both very keen to stay with 232 and to keep it as it is and not make any changes there, because that state may swing the election. And so it's both are pandering to the unions that are out there in those states, both sides of the party. So I just don't see any changes at all to 232 going into an election. Okay. Okay, excellent. That's it for me. Thank you so much. Thanks, Max. As a reminder, ladies and gentlemen, if you would like to ask a question, you will need to press star one on your telephone keypad. Your next question will be from Frederic Bastien at Raymond James. Please go ahead. Good morning, guys. Morning. Morning. Lots of interest in Russel Metals. That's awesome. Guys, John, I recall you flagging the Inflation Reduction Act and some investments in renewable power as a really positive source of growth, like 12-15 months ago. Is this sort of a market you're really excited about? Obviously, demand seems to be broad, strong and broad across geographies and things like that, but any, any specific markets that you're, you're really excited about? So solar is something we're really excited about. Believe it or not, a lot of solar goes on in Alberta. Again, we're very excited about solar. We're participating on both sides of the border there, and also wind. And so as we continue to see the wind projects go forward, that money is now available. That was kind of, they were kind of running out late last year. Those funds are now available to be reused again from the government acts that you mentioned. So that will start to ramp back up as well, and again, good users of our product in that. And so we participate again on both sides of the border there. So we think both of those are good. Obviously, the EV plants are continuing to grow, and we're seeing that transition start to happen. We don't typically participate in automotive.... But on the EV side, we do have some participation through some of our tube laser and value-added work that we're doing for various people. Thank you. You've been at this for a while. Is this, I don't know, is this the best, best markets and best opportunities you've ever seen in your, in your time in the steel sector? It seems like, we're gonna be in for a couple good years of, strong demand, strong prices. I guess that's a nice way of telling me I'm old, Fred, since I've been at it for a while, but -- Well, we've known each other a while. I'm gonna put myself in the same bucket. It's definitely been a very robust market compared to anything I've seen. And really the sustainability of that over three years, there's been some peaks and valleys in that, but everything at a very high. So the demand has been very good, and also the price of steel has been very good. So it appears that the pricing has reset, that the new floor on steel, when you look at where steel will come to and things slow down, will be interesting to see. But it looks like the cost of those things that went in have reset the bar for our industry. And so, yeah, it's been a really nice ride for the last three years, and we don't see anything really pulling back on that for the next, or I guess, the next two or three years. As far as we can see out, we just don't see anything to change that right now. My next question is gonna be, what's keeping you up at night? Doesn't seem like you're, seems like you're sleeping well, but what are the concerns that you're having right now, and certainly potentially with, you know, your people and, you know, the strategy going forward? Yeah, and again, Marty touched on it in his opening comments, and just so proud and excited for our team that they won the MSCI Safety Culture Award. They continue to set records every year with our safety performance. Again, all-time low again this past year on our LTIs. But that's really what keeps me up at night is our, we've got 3,500 Russel family members that are out there every day. This is a dangerous product. Again, we think we've put things in place that are to stop the risk, keep them from happening, but accidents do happen. So the really, the things keeping me up at night are worrying about our teammates, their safety, making sure they go home safely to their families every night, and that we're doing everything we can do, as a company and as a Russel family to take care of them. So that would be the number one. When we look at it from a business operating side, you know, it's really, we've got great people. We've done a good job with succession, building depth in the organization. So that's what I think separates us and makes us really strong, so that definitely does not keep me up. It's, you know, what do we see in the economy? And then what's gonna come in as a black swan event? We've got a balance sheet that's very flexible, that allows us to really take advantage of opportunities or manage markets as they turn down. But, you know, is there another COVID around the corner or a financial crisis? Those things are out of our control, but they do concern me at night. All right. Thanks. That's all I have. Thank you very much. Thanks, Fred. At this time, Mr. Juravsky, we have no further questions. Please proceed. Great. Thank you, operator. Appreciate everybody for joining our call today. If you have any follow-up questions, please feel free to reach out at any time. Otherwise, we look forward to staying in touch during the balance of the quarter. Take care, everyone. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.