Ladies and gentlemen, good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the TimkenSteel Third Quarter 2022 Earnings Conference Call. Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one once again. Thank you, and I will now turn the conference over to Jennifer Beeman. You may begin. Thanks. Good morning, and welcome to TimkenSteel's third quarter 2022 conference call. I'm Jennifer Beeman, Director of Communications and Investor Relations for TimkenSteel. Joining me today is Mike Williams, President and Chief Executive Officer, Kris Westbrooks, Executive Vice President and Chief Financial Officer, and Kevin Raketich, Executive Vice President of Sales, Marketing, and Business Development. You all should have received a copy of our press release, which was issued last night. During today's conference call, we may make forward-looking statements as defined by the SEC. Our actual results may differ materially from those projected or implied due to a variety of factors, which we describe in greater detail in yesterday's release. Please refer to our SEC filings, including our most recent Form 10-K and Form 10-Q, and the list of factors included in our earnings release, all of which are available on the TimkenSteel website. Where non-GAAP financial information is referenced, additional details and reconciliations to its GAAP equivalent are also included in the earnings release. With that, I'd like to turn the call over to Mike. Mike? Thank you, Jennifer, and I appreciate everyone joining us this morning. Our financial performance in the third quarter was notably impacted by the July incident at our melt shop. However, I am encouraged that demand in our markets, mobile, industrial, energy, remains robust now and into the foreseeable future. Currently, we have customer order backlog in excess of 300,000 ship tons, and the majority of our 2023 production capacity is allocated to customers. We are experiencing a positive trend in base sales pricing, which we expect to continue into 2023, and our balance sheet is strong. I am confident that this momentum, along with the execution of our strategic imperatives, will position us for long-term success. Turning to safety, we remain firmly focused on enhancing our safety culture with important initiatives and advanced training that will continue into 2023. Training is focused on improving safety communication, hazard recognition, and systemic change through leading indicator data. We have now trained most managers and operational supervisors. In 2023, we will extend the first phase of this advanced training to the rest of the organization and begin to implement the next phase of our advanced training initiatives. Related to our melt shop incident and future utilization, we expect to average approximately 50%-60% utilization during the fourth quarter, which reflects the continued monthly ramp-up of production and some planned annual maintenance shutdown. We are in the process of implementing new and additional melt shop manning to help us return to our targeted utilization of approximately 80%-85% by the end of the year. While the assets are fully repaired, we are being cautious and taking our time to ensure new team members are proficient and working well together. Turning to our results, third quarter net sales as well as adjusted EBITDA both suffered sequentially as a result of lower volumes, higher manufacturing costs, and a significant decrease in surcharges due to lower market prices for scrap. Kris will cover this in more detail shortly. However, I am encouraged that higher base prices across all end market sectors help to mitigate some of the negative impact of lower shipments. Moving to customer contracts, roughly 70% of our business is on annual contracts. To date, we've completed approximately half of our 2023 pricing negotiations. Some contracts for certain auto producers in the U.S. tend to negotiate later in the cycle, so we do not expect to complete our process until early 2023. Thus far, we have been pleased with the positive conversations and expect that our average base sales price will once again experience year-over-year increases. As I stated, our demand remains strong in all of our end markets. A majority of our customers in the mobile, industrial, and energy markets continue to express optimism in the near term. Our industrial shipments decreased by 30% sequentially, given our melt shop restraints. However, virtually all of our industrial categories, particularly defense and mining, are in a favorable demand environment. In mobile, shipments decreased by 17% compared with the prior quarter. During the quarter, mobile customers were less impacted given that we had more inventory on hand to support their needs. Some customers are still experiencing supply chain disruptions, and inventories are not yet at normalized levels. In the energy market, oil and gas activity, particularly natural gas with the continued challenges in Europe, are projected to remain strong over the next couple of years. Inventory levels appear to have been replenished following the pandemic, and operators remain stringent with their budgetary spending. Touching upon our strategic imperatives, we remain well on track to achieve our targeted $80 million of profitability improvements. In 2022, we expect to realize approximately $25 million of profitability improvements from actions directly linked to our strategic imperatives with the remaining EBITDA improvement expected between 2023 and 2026. Profitability improvement stems from actions centered on commercial excellence, manufacturing and reliability excellence, and administrative process simplification with a strong balance sheet as our foundation. We continually pursue opportunities and target high growth sectors such as energy, defense, and electric vehicle powertrains. We now have dedicated business development leads in each of these areas to better leverage our proven product capabilities. We are committed to operating world-class assets, and we continue to pursue several manufacturing productivity, reliability, and efficiency projects. For example, we are still in the process of moving our scrap yard to be adjacent to our melt shop to improve efficiency. The timing of this project has slightly shifted, and we now anticipate the move to be complete in early 2023 with a run rate savings of $2 million when fully operational. Our information technology transformation is in full swing, and we have delivered on the first of our planned process and application improvements. Actions completed to date are expected to deliver approximately $2 million of savings in 2023 against our overall IT transformation target of $7 million. I sincerely thank our employees for their hard work during this challenging quarter and our customers for their continued trust, our suppliers for their partnership, and our shareholders for their ongoing support. Now I would like to turn the call over to Kris. Kris? Thanks, Mike. Good morning, everyone, and thanks for joining us today. As Mike mentioned, the July melt shop incident significantly impacted our third quarter profitability. While we expect a continued unfavorable impact on profitability in the fourth quarter as we ramp up melt production, we're actively pursuing a business interruption insurance recovery to recoup our losses. I'll be sharing more details shortly regarding the insurance recovery process as well as our fourth quarter outlook and views on 2023. Turning to our third quarter results. Net sales totaled $316.8 million with a net loss of $13.3 million or a loss of $0.29 per diluted share. Comparatively, sequential second quarter net sales were $415.7 million with net income of $74.5 million or $1.42 per diluted share. Third quarter of 2021 net sales were $343.7 million with net income of $50.1 million or $0.94 per diluted share. On an adjusted basis, the company reported a net loss in the third quarter of $4.1 million or a loss of $0.09 per diluted share. For comparison purposes, adjusted net income in the second quarter was $67.4 million or $1.29 per diluted share. Adjusted net income in the third quarter of last year was $55.2 million or $1.04 per diluted share. Adjusted EBITDA was $10.8 million in the third quarter compared with $84.2 million in the second quarter. Drivers of the decrease included lower shipments and higher manufacturing costs, both linked to the melt shop incident in July, as well as a market-driven decline in the raw material surcharge environment. Partially offsetting these items were higher base selling prices and lower variable compensation expense. Compared to the same quarter in 2021, adjusted EBITDA decreased by $61.2 million. This decrease is reflective of higher manufacturing costs, a decline in the scrap raw material surcharge environments, and lower shipments, partially offset by higher base selling prices. Turning now to the details of the financial results in the third quarter. Shipments in the third quarter were 158,500 tons, a decrease of 50,400 tons or 24% compared with the second quarter. The sequential decline in shipments was driven by availability of inventory for shipment as a result of the melt shop incident. Similarly, third quarter shipments decreased 54,200 tons or 25% from the third quarter of last year. In the industrial end market, shipments totaled 71,300 tons in the third quarter, a sequential decrease of 30,800 tons or 30% driven by available inventory for shipment. Demand remains strong from both OEM and distribution customers across the wide range of sectors such as defense and mining. Mobile customer shipments were 71,200 tons in the third quarter, a sequential decrease of 14,200 tons or 17%. We expect mobile shipments to return to a targeted level of approximately 40% of the portfolio going forward compared with 45% of the portfolio in the third quarter. Shipments to energy customers totaled 16,000 tons in the third quarter, a sequential decrease of 5,400 tons or 25%, again, driven by inventory available for shipment. Of our total third quarter shipments, approximately 10,000 short tons were sourced from third-party melt producers, then rolled, finished, and shipped by TimkenSteel. We expect shipments of third-party melt to more than double in the fourth quarter to help support customer demand while we continue to ramp up our melt shop. Over the longer term, we view the recently established third-party melt supply chains as an opportunity to support demand and target end markets. This strategy also improves utilization of our downstream assets without carrying the historical fixed cost and excess melt capacity. Net sales of $316.8 million in the third quarter decreased 24% compared with the second quarter, and decreased 8% compared with the third quarter of last year. The sequential decrease in net sales was driven by lower shipments and a market-driven 13% decline in average raw material surcharge per ton as a result of lower scrap prices. Partially offsetting these impacts were 9% higher base selling prices. The net sales decline compared with the prior year quarter was primarily driven by lower shipments, partially offset by 30% higher base selling prices. Base selling prices increased by approximately $300 per ton on average in the third quarter across our end markets in comparison to the full year 2021 average. Sequentially, base selling prices increased $107 per ton on average, consistent with our expectations and reflective of continued strength in customer demand. Turning to manufacturing, costs increased sequentially by $32.8 million in total in the third quarter, driven by a significant sequential decline in manufacturing cost absorption as a result of the melt shop incident and ongoing production ramp up. Included in the sequential manufacturing cost increase were approximately $8 million of repair and other costs related to the incident. Annual maintenance shutdown costs also totaled approximately $8 million in the third quarter and were a contributing factor to the sequential cost increase. To the extent possible, the company pulled forward annual maintenance activities into the third quarter to minimize fourth quarter downtime. In comparison to the prior year third quarter, manufacturing costs increased by $54.3 million. Drivers have increased year-over-year manufacturing costs included the impact of lower cost absorption related to the melt shop incidents, as well as increased maintenance and the impact from the current year inflationary cost environment. Melt utilization declined to 40% in the third quarter from mid-80% utilization in both the second quarter and the prior year third quarter. From an SG&A expense perspective, in the third quarter, SG&A expense was $16.2 million. SG&A declined by $5.5 million sequentially and declined by $3.7 million compared to the prior year third quarter, with both decreases primarily driven by lower variable compensation and salary expense. Moving on to cash flow and liquidity. During the third quarter, operating cash flow was $46.8 million, and free cash flow was $41.1 million, primarily driven by lower working capital. This marks the company's 14th consecutive quarter of generating positive operating and free cash flow. Through the first nine months of 2022, the company generated $110.8 million of operating cash flow and spent $15.7 million on capital expenditures. We finished the third quarter with a record $262.5 million of cash and cash equivalents, and total liquidity was $487.2 million at the end of September. In other liquidity matters, at the end of the third quarter, we refinanced our asset-based revolving credit facility or ABL. The amended ABL, which matures on September 30, 2027, maintains our borrowing capacity at $400 million and includes improved financial terms and covenants. These improvements include a 25 basis point reduction in interest rate on potential future ABL borrowings, as well as certain enhanced terms in the borrowing-based calculation. I'm pleased with the improved financial terms provided by the amended ABL. We appreciate the confidence and support of our bank group. The credit facility remains undrawn at this time. Switching gears to shareholder return activities. During the third quarter, the company repurchased 1.3 million common shares at a total cost of $19.7 million. Including the common share repurchase activity completed in October, the company has repurchased 2.6 million common shares to date in 2022 at a total cost of $44.5 million, leaving just $5.5 million remaining on our $50 million share repurchase program established in December 2021. This common share repurchase activity, combined with the convertible note repurchase activity earlier this year, represents an 11% reduction in the company's diluted shares outstanding in comparison to diluted shares outstanding in the fourth quarter of last year. Earlier this week, our board of directors authorized an additional $75 million share repurchase program. Returning capital to shareholders continues to be a critical element of the company's capital allocation priorities. This authorization reflects the board and senior leadership's continued confidence in the company's ability to generate sustainable through-cycle profitability and maintain a strong balance sheet and cash flow. We look forward to updating you in future quarters regarding our repurchase program. Regarding pensions, the company recorded a non-cash net loss of $4.8 million in the third quarter as a result of the required remeasurement of certain pension plans. Consistent with prior periods, this remeasurement impact is excluded from adjusted EBITDA results for the quarter. As I reported last quarter, in July, the company settled $256 million of its U.S. pension obligations through the purchase of a group annuity contract from a highly rated insurance company. This annuitization activity represented a 25% reduction in the company's outstanding U.S. pension obligations, and was a significant step towards further strengthening our balance sheet and de-risking our pension plans. Turning now to the fourth quarter of 2022 outlook. From a commercial perspective, demand and base sales prices are anticipated to remain strong across the company's end markets, as Mike indicated earlier. However, fourth quarter shipments are expected to continue to be negatively impacted by inventory availability following the July melt shop incident, as well as normal seasonality. As a result, fourth quarter shipments are expected to be slightly lower than the third quarter. Additionally, from a commercial perspective, we anticipate surcharge revenue per ton to decline sequentially, given market-driven decreases in scrap prices to date in the fourth quarter. Operationally, melt utilization is expected to average approximately 50%-60% during the fourth quarter as we continue to ramp up through the end of the year, while also completing planned melt shop shutdown maintenance. The remaining annual shutdown maintenance will be completed this quarter at an expected cost of approximately $3 million, with a fourth quarter melt shop utilization impact of the planned shutdown of approximately 5%. Given these elements, the company expects adjusted EBITDA to continue to be challenged in the fourth quarter, excluding any potential business interruption insurance recovery related to the July melt shop incident. Capital expenditures are expected to be in the range of approximately $10 million-$15 million in the fourth quarter, resulting in a full year 2022 range of approximately $25 million-$30 million. The reduction in estimated capital expenditures from the previous $35 million full year guidance is primarily due to project timing as a result of supply chain equipment delays. As it relates to the insurance recovery process, we're actively seeking a significant recovery, although the timing and amount of potential recovery remains uncertain at this time. The insurance claim components that we're seeking include, first, the cost of melt shop repairs. Second, any lost sales to customers. Third, the incremental cost of third-party purchased melt during the period in which we're recovering from the incident. Fourth, the incremental cost per ton of internal melt as we continue to ramp up production compared to our historical melt cost per ton. We plan to provide updates on the insurance claim and recovery process in future quarters as appropriate. However, there are no guarantees in this process. As we enter 2023, we remain committed to further enhancing our safety culture and performance. Commercially in 2023, we expect quarterly shipments to begin to recover to levels experienced in the H1 of 2022. As Mike mentioned, we anticipate average base prices to further increase in 2023 following the successful negotiation of annual pricing agreements. Realization of the negotiated base price increases will likely begin late in the first quarter as we fulfill a portion of carryover 2022 demand at the beginning of the year. Additionally, our current inventory level is projected to increase throughout 2023 through a combination of increased output from internal production and additional purchased melt. Regarding inflation, we expect some continued pressure on manufacturing consumables and other input costs next year, with more details to come as those negotiations are completed. Lastly, from an operational perspective, melt utilization rates are expected to be much improved in 2023 compared with the H2 of 2022. To wrap up, our long-term business outlook is bright and our balance sheet is strong. TimkenSteel is positioned for success due to the hard work and dedication of our employees and support of our customers, suppliers, and shareholders. Thanks for your interest in TimkenSteel. We would now like to open the call for questions. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad, and we will pause for just a moment to compile the Q&A roster. We will take our first question from Philip Gibbs with KeyBanc Capital Markets. Your line is open. Hey, good morning. Good morning. First question I had was on the raw material spread headwinds. I think it was over $30 million in the third quarter relative to the second. Is there going to be incremental headwinds in the fourth quarter, or should we just start to see those stabilize at this point? No, we believe there's still gonna be some headwinds in the fourth quarter. I don't know, Kris, if you want to provide any color. Yeah, the first two months, and because we've already set surcharges for the month of November as well, you know, are both down. I think the first month was down around $25 a ton, the second month down around $30, and, you know, to be determined about what December looks like. The shredded scraps that we use in our manufacturing did not go down by as much. So that would create some additional compression in Q4. Not likely as big as Q3, however. Okay. A fraction of that amount or a third of that amount or something like that? Yeah, I can't give you the specifics just because I don't know that last month, but it's trending in that manner. Okay. As it relates to net working capital, obviously a massive source of inflow as your business activities temporarily went down. As you recover that, you said it was going up in 2023, but are we likely to see a pickup in net working capital in Q4? No, we're most likely not gonna see a pickup in net working capital, and our expectation is you'll see modest increases in net working capital in the H1 to three-quarters of 2023. Phil, just to add onto that, the one wild card there is payables, and just depending on where our buying patterns are and scrap prices are as we conclude the year and begin that ramp higher into 2023. That could drive a higher payables balance. We do have likely a bit more CapEx than AP, as you saw at the end of the third quarter or in our guidance year. We revised our CapEx spend. Most of that's just because the cash spend is pushing into 2023, the $6-$8 million. Okay, last question I have is on the production rates at Faircrest, and maybe just talk about the progression, you know, when you think you can. I think you mentioned when you perhaps could get to 80%, but I didn't know if that was a progression as you move through next year or is that something that you wanted to start at? Secondly, how do we factor in or how comfortable are you having the manpower or the labor to accommodate those? 'Cause I know you had been training some new folks. Thanks. Sure. You know, what our expectation is that we'll be back to our targeted utilization rate that, around that 80%-85%, you know, towards the end of the year, going into the first quarter of 2023. From a manpower standpoint, we have a fair amount of new employees that we're training, and we are working towards getting there. That's why we're taking a very, I would say, cautious, calculated ramp-up approach, to the Faircrest melt shop. We're just working and focused on training to get their proficiencies and collaboration working as a team at the level that we expect to be able to return to our targeted utilization rates. Thank you. Thank you, Phil. We will take our next question from Dave Storms with Stonegate Capital Markets. Your line is open. Good morning. This is John sitting in for Dave Storms. Thank you for taking my questions. Good morning, John. You had touched on this earlier just, considering the current melt utilization rate of 40%, should we expect the current backlog to drive that rate, you know, back into the high 70, low 80% range? If so, what is the timeline to get back to those levels? Well, like I just said, we are targeting to ramp up through the remainder of this quarter and get back to our targeted utilization rate of 80%-85% by year-end or early Q1 of 2023. Got it. Understood. Given the refinance revolver and high cash balance, can you speak a little bit more about any plans to utilize the great liquidity position? How do you balance internal and external growth opportunities when it comes to the cash deployment? Sure. You know, we have a capital allocation strategy that we've reviewed with our board. We have a go-forward strategy and a plan. You know, first, our focus is on investing in our assets and our product capability to service our customers. Those investments are centered around reliability, manufacturing, productivity improvements, quality improvements, and service improvements to our customers. Secondly, we are focused on our balance sheet and continue to ensure that we have a strong balance sheet. Then thirdly, our shareholders, and that's why we came out and announced an increase in year-over-year increase in our share buyback program. We always will be going. As we go forward, we'll always be looking for growth opportunities that could possibly lead to M&A possibilities. If the opportunity exists and it aligns with our strategic imperatives, we would be open to pursuing those. Kris, is there anything you wanna add on that? I think you covered it nicely, Mike. Yeah. Thank you. Great. Thank you. Lastly, can you just dig into a little more, you know, with the continued rise in interest rates, how's that gonna impact your end market demands? Yeah. Well, there's no doubt as the cost of money gets more expensive, it's gonna have an effect on the consumer. Everything that, as we've talked to our customers regarding our contract negotiations for 2023, things look pretty solid, at least I would say for the H1. We'll see what develops post-election and other things as they develop globally, what it may imply to the H2 of 2023. You know, we're pretty positive of what we hear. As we've said earlier that, you know, we've allocated all our ship ton capacity for 2023. We're feeling pretty good about that. All right. Awesome. Thank you. Thank you. Thanks, John. Ladies and gentlemen, this concludes today's conference call, and we thank you for your participation. You may now disconnect.