Good morning, ladies and gentlemen, and welcome to our 2024 first quarter results call for Russel Metals. Today's call will be hosted by Martin Juravsky, Executive Vice President and Chief Financial Officer, and John Reid, President and Chief Executive Officer of Russel Metals, Inc. Today's presentation will be followed by a question and answer period. At that time, if you have a question, please press star one on your telephone keypad. I'll now turn the meeting over to Martin Juravsky. Please go ahead. Great. Thank you, operator, and good morning, everyone. I plan on providing an overview of the Q1 2024 results, and if you want to follow along, I'll be referencing the PowerPoint slides that are on our website. Just go into the Investor Relations section, and it's located in the conference call sub-menu. If you go to page three, you can read our cautionary statement on forward-looking information. So let me start with a little perspective on Q1, and I think about the quarter, it kind of highlights two key things. First, how we perform during periods of steel price volatility. Over the past couple of quarters, the benchmarks for sheet and plate have swung up and down by a fair amount, probably around 20%, give or take. Not only have we generated solid margins, earnings, and returns over the past few quarters, but has been with relatively low volatility as compared to the underlying steel price environments. In the past, steel price volatility has occasionally led to significant inventory impairments and margin compression, and I think we are starting to see the benefits of our business changes with more of those opportunities on the come. Second, there have been a lot of behind-the-scenes initiatives that provide us with a springboard for the balance of 2024 and beyond. One, we have a series of our equipment upgrade and facility modernizations that are starting to come to fruition in Q2, Q3, Q4, and beyond. Two, we've set the stage for further enhancements to our debt structure that should lead to more flexibility and a lower cost capital structure. And three, we are continuing to look at new potential acquisition opportunities in addition to the extensive planning that is being done for the Samuel's acquisition. So let me now go through some of the materials, and let's start with market conditions on page five. As said earlier, we've seen the underlying steel prices exhibit a fair amount of volatility over the past while. That said, hot rolled sheet prices appear to have somewhat stabilized after hitting a trough in late March. The other interesting observation is that when we look at the trough price points that have been experienced over the past 18 months, HRC prices have bottomed at levels that are well above historical troughs. This speaks to the steel producers demonstrating some degree of discipline at the same time that demand is reasonable. For plate, we have seen prices taper off over the past several quarters. If we look back a few quarters ago, the spread between plate and sheet was well outside of the historical norm. As we look at the prevailing environment, the spread has come back to a level that makes more sense given the industry cost curves. Taking all that together, we are looking at price levels today that are relatively healthy by historical comparisons. On supply chain inventories, they have bounced around a bit but remain in check. And last, most importantly, demand is reasonably solid across our business. If we go to page six, we have a snapshot of our historical results. The start for 2024 was very similar to the end of 2023. We generated significant cash flow from operations and continued to have a very strong balance sheet, and that gives us flexibility to pursue a range of opportunities. If we look across the various charts, going from top left, revenues for the quarter were CAD 1.1 billion, which was up from CAD 1 billion in Q4. EBITDA was CAD 84 million. EBITDA margin was 8%. Earnings per share were CAD 0.82. All these were up slightly from Q4. Our annualized return on invested capital came in at 19% and remains above our minimum target return over a cycle, and we continue to be first quartile within our industry. Lastly, in terms of capital structure, which you see in the bottom right, we have net cash position of CAD 277 million versus net debt of almost CAD 500 million at the end of 2019, and we have a multidimensional approach to using that dry powder prudently over time. Going to our more detailed financial results on page seven. From an income statement perspective, I covered several of the high-level items on the previous page, but a few other items to note. Revenues of CAD 1.1 billion was up 4% from Q4. Some of this was the impact of the volume recovery in Q1 versus Q4, as that normally evolves from a seasonal perspective. On gross margins, all segments were up a little bit, and I will discuss these in more detail in a minute. Interest expense came down to zero as we are generating interest income on our growing cash reserve. Our Q1 results were impacted by a few non-operating type items. Stock-based comp was nil for the quarter versus CAD 7 million expense in Q4. We had a CAD 3 million reversal in our inventory NRV reserves. Again, the proactive inventory management has reduced much of the NRV risks that we have experienced in the past. From a cash flow perspective, in Q1, we used CAD 66 million for working capital, which was mostly the seasonal pickup in accounts receivable and the decline in accounts payable as a result of the timing of our annual variable compensation that gets paid out in Q1. No major changes in inventory for the quarter. CapEx of CAD 24 million was in line with our tracking to be greater than CAD 100 million for this year, as our key discretionary projects continued to advance. In the quarter, there were no big projects, but rather a series of projects, including the installation of new lasers in Winnipeg, the near completion of our greenfield location in Saskatoon, as well as the commencement of a project to expand our Texarkana facility. From a balance sheet perspective, we are net cash position CAD 277 million, which I said earlier. As a result of our strong position, we'll be completing the redemption of our CAD 150 million 6% notes today. There are other debt structure enhancements that are in the works that should unfold in the coming quarters. As I said in the past, we manage the company with a conservative investment grade type credit bias, and this approach should give us better financial flexibility and reduce our capital cost on a go-forward basis. Our liquidity is near CAD 1 billion. Well, one item to note is that the Canadian dollar did weaken in the quarter, which did have an impact on our OCI account in translating our U.S.-based financial results into Canadian dollars. In the quarter, we picked up 339,000 shares under our NCIB, which brings the total to 3.5 million shares since we put the program in place in August 2022, and our average purchase price, cumulatively to date, is CAD 35.56 per share. Our book value per share continued to go up and is almost CAD 20 per share, notwithstanding our share buybacks in the quarter. Lastly, we have declared a 5% increase in our quarterly dividend to CAD 0.42 per share, and I'll discuss that in more detail a little bit later on. On page eight, we show our EBITDA variance analysis between last quarter and this quarter. In looking at service centers, the volumes were a positive pickup from Q4, and our margins were also up. There was a CAD 13 million increase in operating expenses, which was a bit out of the norm, as it was a combination of variable compensation tied to financial results, the implications from FX movements, and some non-recurring costs related to the Samuel's acquisition. Energy field stores was up CAD 3 million as it continued to benefit from a solid energy environment. Steel distributors was down CAD 2 million. There was also a CAD 5 million unfavorable variance in other, and it was a number of all relatively modest items. We had a favorable impact from the lower mark-to-market on our stock-based comp, but it was more than offset by normal seasonal decline in our Thunder Bay terminal operations, some Samuel acquisition costs, and a few other small items. On page nine, we have our segmented P&L information. For service centers, revenues were up, and this was mostly driven by higher volumes, but we also saw slightly higher price realizations as well as better margins. I'll go through the more detailed metrics for our service centers on the next page, but our overall results were pretty good in a quarter that experienced a fair amount of price volatility. In energy field stores, we are continuing to see solid performance. Q1 revenues and earnings were up as a result of good market conditions. Distributors' revenues and earnings were down due to some delays with inbound shipments and more conservative procurement due to the market conditions. That said, our margins did improve, albeit on lower revenue. On page 10, we are showing a deeper dive on some of the metrics for metal service center business. Top right graph is the past five years for tons shipped. The Q1 2024 volumes were up 4% versus Q4, but down 6% versus this time last year. The Q1 2023 comparison point did benefit from very strong demand and unusually good period last quarter, whereas Q1 2024 was solid, but it was also impacted early on in the quarter by some weather-related shipping constraints that did occur in January. On the bottom left graph, we have the revenue and cost of goods sold per ton. Revenue per ton, our price realizations increased by CAD 52 versus a CAD 7 increase in our cost of goods sold, which resulted in a CAD 44 per ton pickup in margin. That is shown in the bottom right graph. For Q1, our gross margin was CAD 487 per ton, which remains higher than our historical average of closer to CAD 300. As we've said many times in the past, our investment initiatives should lead to higher average margins and lower volatility associated with those margins over the cycle. On page 11, we have illustrated our inventory turns. This chart shows the inventory turns by quarter for each segment, energy in red, service centers in green, and steel distributors in yellow. In addition, the black line is the average for the entire company. Overall, our inventory turns improved from 3.8 turns at December 31st to 3.9 for this quarter. By sector, our service centers improved to 4.6 turns, our energy field stores came up to 3.2, while our steel distributors declined a little bit to 2.4. On page 12, we have the impact of inventory turns on inventory dollars. Overall, for the quarter, there wasn't a big change. It was very comparable at March 31st versus December 31st. In service centers, tonnage was slightly lower and cost per ton was slightly higher than at year-end. On page 13, the overall impact on capital utilization and returns. Our capital deployment moved up to about CAD 1.4 billion because of an increase in working capital and an increase in PPE as a result of our incremental spending on a variety of projects. More importantly, our returns continue to be industry-leading, with last twelve months' return on invested capital at 23%. If we go to page 14, I have an update of our capital structure. The continuation of our strong free cash flow and disciplined approach to utilization gives us a lot of flexibility. On the left table, our cash position was CAD 575 million at March 31st, which is up CAD 174 million from this time last year. Our equity base increased to CAD 1.7 billion, in spite of our share buybacks. The chart on the right shows our book value per share, which is almost CAD 28 per share, which is a little over CAD 2 increase since this time last year. On page 15, we have an update on our capital allocation priorities. Given our strong balance sheet, we continue to have this multipronged approach. As we've always said, for investment purposes, we're trying to seek average returns greater than 15% over the cycle, and as already discussed, we've delivered well above that target for extended period of time. The ongoing initiatives are threefold: the identification and pursuit of value-added projects. We have over 40 projects on the go right now, and as every day, as every week goes by, we're identifying more and more interesting opportunities. Facility modernizations, we have 5 on the go that are tracking for completion at various times in late this year, and early next year. As I mentioned earlier, Saskatoon is probably the first one to come, and, we're very excited about all those initiatives. In total, our CapEx project pipeline is greater than CAD 200 million. It's as large as it's ever been, and the key thing for us is it continues to advance the opportunity for high return, high margin, low volatility-type projects that serve our customers and serve our communities in which we operate. In terms of acquisitions, we are continuing to work on the Samuel deal. As we've said publicly, we are continuing our dialogue with the Competition Bureau to resolve their concerns related to a narrow segment of product in a specific geography. As much as I would like to go into more detail, it's not appropriate to be more specific at this time. In addition, we are actively looking at other acquisition opportunities that are coming available and are interesting complements to our existing platform. In terms of returning capital to shareholders, we have adopted a flexible approach over the last few years. For dividends, we are announcing a 5% increase in our quarterly dividend to take it to CAD 0.42 per share, which will be payable on June fourteenth of this year. We believe the increase makes sense as we have a strong capital structure, as well as continued strong earnings and cash flow. For the NCIB, we acquired 339 shares last quarter. As I said earlier, since we put this in place in August of 2022, we've acquired 3.5 million shares at an average price of CAD 35.56 per share, and we expect to continue to utilize the NCIB on an opportunistic basis. If we compare our last 12 months activity of our NCIB versus our new dividend run rate, they are each plus or minus about CAD 100 million. So we are close to a balance between the two forms of capital repatriation. I've said in the past, and that 50%, 50% is not a hardwired target, but it's a good litmus test for us of trying to be somewhat more balanced in terms of returning capital to shareholders. On page sixteen, I wanna provide a longer-term context around returning capital to shareholders. On the top left graph, you see our historical dividend profile. With the just announced increase to CAD 0.42 per share per quarter from the CAD 0.40 level, which was an increase from CAD 0.38 at this time last year, we are showing that if we can successfully grow the underlying business, which we think we have, that could and should lead to a cadence for dividend growth. On the bottom left, you see our quarterly NCIB activities since we put it in place in middle of 2022. This illustrates that we don't have a fixed approach to the program on a daily or weekly or quarterly basis, but we view it as an opportunistic way to buy shares at a discount to our view of intrinsic value, and we have been more aggressive at certain price points than others. When we look at the bottom right chart, the impact of the NCIB has been a gradual reduction of our share count over the past couple of years. On the top right chart, the aggregation of the dividends versus the NCIB shows that over the past couple of years, there's been that more balanced approach that I mentioned earlier. In closing, I want to use the graphical illustration on page 17 to discuss some approaches that we've changed to our business over the last couple of years. The left chart is where we have been in the past in terms of delivering results, and there has been a very conscious effort to re-engineer our earnings profile. We operate a mature business that encounters some element of cyclicality. However, over the last several years, we've consistently said that one of the outcomes of our portfolio changes should be to raise the cycle floor, raise the ceiling, reduce the volatility through the cycle, as well as grow the business. In many ways, Q1 illustrates this objective as we navigated through large swings in steel prices and managed to generate really good results in spite of that steel price volatility backdrop. In addition, with the ongoing initiatives to both reinvest internally and grow externally, we'll continue down this path that's illustrated on that right-hand chart. In closing, on behalf of John and other members of the management team, I would like to express our appreciation to everyone within the Russel family for your contributions to our performance and future success. That concludes my introductory remarks. Operator, please feel free to open the line for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session... Should you have a question, please press star, followed by one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Michael Tupholme, TD Securities. Michael, please go ahead. Thanks. Good morning. Hey, Mike. Morning. Morning. So I just want to start with the service center segment and question about the gross margins there. You did see quarter-over-quarter improvement in service centers gross margins in Q1. Just given the way steel prices progressed through Q1 and the way they've traded through the first part of Q2, wondering if you can provide some commentary on your expectations for Q2 2024 service centers gross margins. Yeah. Well, it's a fair question, Mike, because you're right. Q1 was higher than Q4 on average, but in some ways, when you pierce through the quarter, obviously there was some steel price volatility as we got into February and March. So some of the dynamic unfolded that the margins did come off during the quarter compared to where they were at the beginning of the quarter. And, you know, depending, obviously, what happens on steel prices for the rest of Q2 and Q3 and Q4, that'll obviously flow through in terms of timing. There is the lag effect that we have talked about in the past in terms of what happens in the steel market and how that flows through our margins. For purposes of looking at the exit point of Q1 and the entry point of Q2, margins were a little lower at the end of the quarter than at the beginning of the quarter. Okay. That's helpful. Thank you. And then if we look at volumes in service centers, saw some improvement sequentially. On a year-over-year basis, though, if we're looking at it from that perspective, tons shipped in the first quarter were down. Wondering how we should think about that on a year-over-year basis in the second quarter. Yeah. So one of the interesting things, Mike, is if we look... In some ways, it's similar to your question on margins. We obviously have more granular information when we look internally and see what's going on in the market more than a quarterly basis, when we look at stuff monthly or weekly, for that matter. We had a really, really strong March of 2023. That was very unusual, well above the norm, and it, but it was an outlier. So if we remove the March of 2023 dynamic, we're pretty much tracking where we would have been on any other month-over-month comparison, comparing a month in 2024 to a month in 2023. So if you look at Q1 as a reference point, that's a pretty good reference point in terms of volume leading into Q2. Yeah, Mike, just to, just to add on to that as well, Martin mentioned it earlier, but we really had some odd weather dynamics that were excessive in Q1, so we lost a lot of shipping days across a lot of locations as well. And so if you go back to days, we actually ship, the volumes are really nice, pretty steady there. Okay, that's helpful. Thank you. And then maybe just on the steel distributor segment, the reference to overseas shipping delays that you saw, can you elaborate on that situation? And maybe as a follow-on to just better understanding what was happening there, can you talk about whether the situation has been resolved and what the implications are, if any, for an impact on the second quarter? Yeah. So, this really ties into all the geopolitical events that are happening in the Middle East. And product coming through the Suez Canal and through sensitive political areas, there's been delays. And so that reference was to the part of the business that brings in products from export markets and might have to renavigate its routes coming into North America. So that was just a reflection of some of those issues that everybody is encountering for product coming in through that part of the world. Okay. And I mean, I realize there's still geopolitical issues, so my earlier question about whether it's resolved, you know, in that sense, there are still issues in the world. But I guess, presumably, you know, as reroutes readjust themselves, things would normalize. Just wondering if that has happened yet as far as the flow of product coming in and if we do see any impact in Q2, or is this sort of back to normal now that perhaps things have adjusted? Yeah, Mike, I think we've normalized now that we rerouted, and so there's a sequential coming behind it now, and so you have a pattern to it. So the rerouting, again, threw it off for 3-4 weeks or so, and now I think we're back on track, so I don't think you'll see that carry into Q2. Okay, got it. All right. I will, I'll get back in the queue. Thank you. Great. Thanks, Mike. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star one on your touchtone phone. Your next question comes from Jonathan Lamers, Laurentian Bank. Jonathan, please go ahead. Thank you. Just to follow up on the gross margin per ton. So nice improvement from Q4 to Q1, despite lower market plate prices. My question is: Were there any specific value add projects that started to contribute positively to the margin in Q1 versus Q4? Was there some benefit from just... you know, smart tactical moves in the operation? Should you just tell us a little bit more about what happened sequentially? Yeah, Jonathan, so there was not one specific project in value add, but we had multiple projects coming online in Q4 that really ramped up in Q1. So we started to see that additional pull there, plus things that they had been working on where they had the equipment, we added additional shifts. So we started to see that pull across as well. So it allowed us to expand that margin during the quarter. And so, yeah, we were real pleased with that, and we continue to see that growing. And so we think that's something we'll see into the future as well. Okay, thank you. And for the value add projects you do have planned for the balance of 2024, can you provide us a sense of how those are weighted across your business divisions? Are they primarily in the MSCs, or any for the energy products business? Yeah, it's almost all of it's in the metal service center side. Probably fair to say, too, John, in terms of our geographic mix, there were some projects that were done in Canada this year, but there's probably more of a skewing to U.S.-based service centers, where some of that is undertaking over the next little bit. That's right. Okay, and Martin, during your prepared remarks, you reiterated that on the balance sheet, you're looking at other enhancements. Are you able to provide us with any hints as to what you're working on there? Sure. So Jonathan, you know, as I mentioned, we're, we have the one series of notes that are callable, that were callable in March, and so that transaction, in terms of the par call, is happening today. We have another series of legacy high yield notes that are par callable in October, and it wouldn't be unreasonable to think that given our financial position, that those also get cleansed out of our system. In conjunction with, you know, a legacy high yield capital structure evolving to a more traditional investment-grade capital structure, some of that will go into what is our new bank debt arrangement look like in terms of having a more traditional investment grade type structure, at all parts of our capital structure. So part of it is kind of cleaning out some of the legacy stuff in terms of the term notes in our capital structure, and then restarting again with a more traditional, more flexible, covenant- lite approach, and frankly, lower cost that goes with that. Okay, thank you. One more question. In the notes to the financial statements on the Samuel acquisition, there is a note that Russel has made a timing commitment to the Bureau. Are you able to explain what that timing commitment is? Well, what we've effectively done with that timing commitment is we've undertaken to keep the dialogue going with them as we try and address their issues and concerns. That goes back to why we made our disclosure, that it wasn't gonna close in Q2, which was our original target, and it'll so it won't close in Q2. We've made that timing commitment to the Competition Bureau that we'll continue to work with them. We can't be more specific because we don't know exactly what the timing is gonna look like, other than we have flexibility to work with them in as cooperative a manner as we can. Pause the line. Thanks for your comments. Okay. Thank you. Thanks, Jonathan. Thank you. Your next question comes from Michael Tupholme, TD Securities. Michael, please go ahead. Thanks for taking the follow-ups. So just on the energy field stores segment, you talked about opening some new sites in Q1. Can you talk about where those are located and also talk about any plans for additional energy field stores over the rest of the year? Yeah. Predominantly Western Canada, and it was through our Comco division, where we've taken on some new business and a new contract there. And then through the rest of the year, we're consistently looking to grow in the field stores. Again, it's a low cost of entry, fairly short-term leases when we do those. And so we're consistently looking in both the U.S. and Canada at those. And then if there's any viable acquisition opportunities in the energy field store, we'll look at those as well. Okay, maybe that feeds into the next question just about acquisitions. I think, Martin, you, you mentioned a couple of times that, beyond working to complete the Samuel acquisition, you're looking at other things. Can you provide a little bit more detail around, the types of things you'd be looking? I mean, John just mentioned energy field stores as a possibility, so, gather it's both service centers and energy field stores. Maybe you can comment on that and, the kinds of characteristics and, and size and whatnot. Anything you can, offer up would be helpful. Yeah, you know, it's a good question, Mike. I say that it, it's pretty robust, the stuff that is becoming available again. The characterization of, it's, as John said, it's, there's some stuff on our energy field stores that are interesting. There's some stuff that is within our metal service centers that are interesting, and frankly, there's one or two adjacencies that are popping up as well. All those things are under consideration. None of them are what I characterize as huge in and of themselves, but they're all incrementally interesting, and in aggregation, are things that we would, that we're spending some time thinking our way through and looking at very carefully. That's sort of, in some ways, it represents there are ideal profiles. You know, I've joked somewhat in the past, we always use the baseball analogy of where we are on our value-added initiatives being the fourth inning of a nine-inning ball game. Well, in some ways, the other baseball analogy on acquisitions is these are singles or doubles, the types of things that we're looking at. Easily fit within what we're doing, complementary to what we're doing, adjacencies that are might be in different product mixes or different target customers, but very similar to what we're doing right now, where they could be standalone segments. So, and that's both on the energy field stores as well as the service center side. Does that, does that get to your question, Mike? Yeah, I know, definitely. That's very helpful. Appreciate it, and I will leave it there. Thanks, Mike. Thank you. Ladies and gentlemen, as a final reminder, should you have a question, please press star one on your touchtone phone. Your next question comes from Kevin Shi, Stifel. Kevin, please go ahead. Thanks. Good morning, everyone. Morning to you, Kevin. Just a quick one for me. I'm just curious to hear about your thoughts on the recently published weekly steel prices by both Nucor and Cleveland-Cliffs. I'm wondering if you've seen any impacts at that front. I know it's still early days, and if not, what are your thoughts on what the potential impact could be on the weekly prices? Thanks. You know, thanks. Thanks, Kevin, and this is gonna be interesting to watch it unfold. As you said, it is the early days. It does give some validity to the indexes that are out there, you know, with the CRU, the trends that are moving out there, that are public indexes with Nucor and others now having a published price. They do this in other products, and it's been very successful, whether it be in their long products, and they've done it for years, so they're obviously... That sets kind of the bar, for what the market is doing trend-wise, and so it, it has proven very effective in other products. We'll see in flat roll how effective it becomes and if it holds water, but thus far, it seems to, again, add some credibility and validity to the indexes that are published out there. So thus far, it seems to be working. We'll watch it closely, but it is something that I've never seen done in my 30-plus years in the business, effectively in flat roll. So but again, I think it's something that's necessary and needed for the industry. So if this works well, I think it will help stabilize some of the ambiguity around pricing. That's very helpful. Thank you, and I'll hang it away. Thanks, Kevin. Thank you. There are no further questions at this time. Please proceed. Great. Thank you, operator, and appreciate everyone very much for joining our call. If you have any questions, please feel free to reach out at any time. Otherwise, we look forward to staying in touch during the balance of the quarter. Thanks, everyone. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.