Greetings, welcome to the Reliance Steel & Aluminum Co. first 1/4 2022 earnings call. At this time, all participants are in a Listen-Only Mode. A brief Question-And-Answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kimberly Orlando with ADDO Investor Relations. Thank you, Kimberly. You may begin. Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's first 1/4 2022 financial results. I am joined by Jim Hoffman, CEO, Karla Lewis, President, and Arthur Ajemyan, Senior Vice President and CFO. A recording of this call will be posted on the investors section of our website at investor.rsac.com. The press release and the information on this call may contain certain Forward-Looking statements, which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainties, or other factors, including the impacts of geopolitics and the COVID-19 pandemic and related economic conditions on our future operations, which may not be under the company's control and may cause the actual results, performance, or achievement of the company to be materially different from the results, performance, or other expectations implied by these Forward-Looking statements. These factors include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K for the year ended December 31, 2021, under the caption Risk Factors, disclosure in our press release this morning, or other documents Reliance files or furnishes with the Securities and Exchange Commission. The press release and the information on this call speak only as of today's date, and the company disclaims any duty to update the information provided therein and herein. I will now turn the call over to Jim Hoffman, CEO of Reliance. Good morning, everyone, and thank you for joining us today to discuss our first 1/4 2022 financial results. I will begin with an overview of our performance and capital allocation activities. Karla will then speak to our operating results and demand trends by end market, and Arthur will conclude with a review of our financial results. Outstanding operational execution throughout our family of companies produced first 1/4 results representing a continuation of the record performance we achieved in 2021, and once again demonstrating the durability and effectiveness of our business model. Notwithstanding ongoing macroeconomic challenges, our performance was supported by positive underlying trends, including continued strong demand with improving shipment levels in each month of the 1/4, along with ongoing strength in metals pricing. Our results also benefited from our strategic diversification of products, end markets, and geographies, as well as strong ongoing support from our domestic suppliers and valued relationships with our loyal customers. Additionally, our wide geographic footprint with our 315 locations, close proximity to our customers, and proprietary fleet of trucks allows us to provide a quick order turnaround. Approximately 40% of the orders are delivered within 24 hours of our customers placing that order. These factors collectively help generate another record for quarterly net sales totaling $4.49 billion. The strength of our top line, coupled with a resilient gross profit margin of 30.9%, led to record quarterly gross profits of $1.39 billion. In an environment characterized by improving yet volatile metals pricing trends and limited product availability, our managers worked hard to preserve our margins by implementing price increases at the time of mill announcement and appropriately pricing the value we provide our customers. Our customers continue to look to us to provide increased value through Industry-Leading processing capabilities. We have invested more than $1 billion over the last five years to meet increased processing demand. Though we experienced some gross profit margin compression compared to the fourth 1/4 of 2021 due to inventory costs approaching replacement costs for certain of our products, key elements of our model, such as small order size, quick turnaround, a broad range of Value-Added capabilities, and careful expense management, enabled us to improve bottom-line profitability and led to record quarterly earnings per share of $8.33 for the first 1/4 of 2022, as well as record first 1/4 cash flow from operations of $404 million. Our significant cash generation continues to fuel our capital allocation strategy, which remains focused on both growth and stockholder returns, and we continue to see new and exciting growth opportunities for Reliance. We recently increased our 2022 capital expenditure budget to $455 million from $350 million, with the majority of this increase directed towards a brand-new state-of-the-art facility in Texas to expand our existing capacity and support announced new semiconductor fabrication facilities being built in the US. We are well positioned to support elevated levels of growth in the semiconductor and other end markets as additional reshoring opportunities present themselves. With that said, considering extended lead times throughout the supply chain, we believe our cash outlays for capital expenditures in 2022 will be in the $260 million-$290 million range. In regard to M&A, the integration of the 4 acquisitions we completed in the fourth 1/4 of 2021 is progressing as planned and brought the total number of acquisitions since our 1994 IPO to 71. The M&A pipeline remains robust and we continue to see a high volume of potential opportunities. In addition to growth, stockholder returns remain a top priority. We have paid regular quarterly cash dividends for 63 consecutive years without reduction or suspension, and have increased the quarterly dividend 29 times since our 1994 IPO. In summary, Reliance continues to benefit from our ongoing focus on operational execution and continuous improvement throughout our business, as evident by our record first 1/4 financial performance. The core tenets of our unique and sustainable model, including our diversification, scale, customer service focus, long-term supplier relationships, and our buy domestic philosophy, continue to empower profitable operations throughout industry cycles. Importantly, we've been able to consistently secure the metal we need to support our customers' requests despite broader macroeconomic challenges, including the COVID-19 pandemic and subsequent supply chain disruptions, and more recently, supply chain disruptions attributed to the war in Ukraine. No matter the environment, Reliance remains well-positioned to help America rebuild. Thank you for your time and attention today. I will now turn the call over to Karla, who will review our operating results and demand trends. Karla? Thanks, Jim, and good morning, everyone. I'd like to begin by congratulating and thanking all of my colleagues in the Reliance family for their contributions that produced another record-setting 1/4 amid a challenging environment. Your perseverance and dedication to operational excellence and safety, our highest value at Reliance, continued to drive our Best-In-Class performance. I'll now turn to our first 1/4 operational performance. Our first 1/4 tons sold were up 10.7% from the fourth 1/4, surpassing our guidance range of up 5%-7%. Reliance, our suppliers, and our customers experienced labor and supply chain disruptions from the Omicron surge in January and to a lesser extent, February. In addition, uncertainty around metal prices impacted the buying patterns of certain of our customers in the first few months of the year. As these headwinds subsided, our shipment levels improved and spiked in March. We believe our improving shipment levels better reflect the strength we've been seeing in underlying demand across the vast majority of the products we sell and in the key end markets we serve. Strength in demand, along with increased metal costs for many of our products, resulted in a 1.5% increase in our average selling price per ton sold over the previous 1/4 compared to our guidance of down 2%-4%. Prices for certain carbon steel products declined sharply in the first two months of 2022, then reversed rapidly in early March at the onset of the Ukraine crisis, with significant price increases for aluminum and stainless steel products. As a reminder, given the diversity of our product mix, we have limited exposure to hot-rolled sheet and coil products, which represent only 10% of our total sales dollars. Looking ahead, general market conditions, including longer lead times for many of the products we sell, remain supportive of elevated pricing continuing into the second 1/4 of 2022. As Jim noted, our first 1/4 gross profit margin compressed somewhat relative to the prior 1/4 on both a LIFO and FIFO basis as inventory costs began to catch up with our average selling price for certain products. On a FIFO basis, which is how we measure our day-to-day operating performance, we achieved a non-GAAP, FIFO gross profit margin of 31.9%, down 320 basis points from the prior 1/4. However, the trend of declining gross profit margins reversed in March, due mainly to increases in aluminum and stainless steel prices. I'll now turn to a high-level overview of our key end market trends. Demand for non-residential construction, which includes infrastructure and is the largest end market we serve, improved over the fourth 1/4 with notable strength in March. Demand for the toll processing services Reliance provides to the automotive market remained at healthy levels during the first 1/4, despite ongoing supply chain challenges, including the continuing impact of the global microchip shortage on production levels. Underlying demand in heavy industry for both agricultural and construction equipment continues to improve from strong levels with a significant increase in our shipment levels compared to the prior 1/4. Similarly, demand across the broader manufacturing sectors we serve, including industrial machinery and consumer products, continues to improve. Semiconductor demand remained robust during the first 1/4 and continues to be one of our strongest end markets. This is an area we're continuing to invest in to service the significant semiconductor manufacturing expansion underway in the United States. Commercial aerospace demand continued to improve with our first 1/4 increased year-over-year shipments since the onset of the pandemic. As a reminder, roughly half of our exposure to aerospace is commercial. Demand in the military, defense, and space portions of our aerospace business remains solid with strong backlogs. Finally, demand in the energy sector, which we define as mainly oil and natural gas, continued to improve with our first 1/4 shipments higher than both the prior and year-over-year quarters. We remain cautiously optimistic demand trends will continue to improve in most of the end markets we serve throughout the remainder of the year. Further, we anticipate metals pricing will remain elevated in the near term, with prices on nearly every product we sell at historical highs. These are favorable environments for Reliance, especially given our model that focuses on providing the best service to our customers, supporting our key domestic suppliers, and the well-being of all of our Reliance family members. I'll now turn the call over to Arthur to review our financial results. Thanks, Karla. Good morning, everyone, and thank you for joining us. As Karla highlighted, ongoing strength and demand led to incremental improvements in our daily shipment levels throughout the first 1/4. Solid demand trends coupled with higher selling prices, strong gross profit margins, and operating expense leverage helped drive the highest quarterly non-GAAP earnings per share in Reliance's history of $8.42, surpassing our guidance of $7.05-$7.15 per share. Our record performance was a direct result of our model, specifically the key elements of product, end market, and geographic diversification, Industry-Leading Value-Added processing capabilities, pricing discipline, and a shorter supply chain due to our buy domestic philosophy, all of which collectively supported higher shipment levels and elevated selling prices during the first 1/4. As a result, we generated record quarterly sales of $4.49 billion. Our non-GAAP gross profit margin of 31.1% for the first 1/4 remained strong and near the high end of our sustainable range despite LIFO expense of $37 and a half million. As you may recall, that our guidance for Q1 included LIFO income of $25 million based on our $100 million dollar annual income estimate for 2022. However, as a result of higher than anticipated costs for certain non-Ferrous and carbon products in the first 1/4 of 2022, we revised our 2022 annual estimate from $100 million of LIFO income to $150 million of LIFO expense. Consistent with our accounting policy, we allocate our annual estimate on a pro rata basis each 1/4. Accordingly, our current projection for LIFO expense in the second 1/4 of 2022 is $37.5 million. Now, had we recorded our original LIFO income estimate, our first 1/4 2022 earnings per diluted share would have been higher by $0.75. In prior years, we will revise our expectations each 1/4 based on our inventory costs and metal pricing trends. As of March 31, 2022, the LIFO reserve on our balance sheet was $857.9 million, which will be available to benefit future period operating results and mitigate the impact of potential declines in metal prices on our gross profit and pre-tax income. Moving on to expenses. Our first 1/4 same-store SG&A expenses decreased $11.4 million, or 1.9% compared to the fourth 1/4 of 2021 despite higher sales levels. Lower incentive pay, including holiday bonuses, more than offset the impact of higher variable costs associated with incremental volumes in the first 1/4. On a year-over-year basis, our same-store SG&A expenses increased $70.1 million or 13.5%. The majority of that increase was attributable to inflationary increases for wages, fuel, freight, and packaging costs, as well as higher incentive-based compensation due to substantially higher levels of gross profit and pre-tax income. As a reminder, the majority of our expense structure is variable, with approximately 65% of our total SG&A costs being people-related. To recap, the combination of a healthy demand environment, our ability to sustain an elevated gross profit margin despite record high selling price levels, and leverage on SG&A expenses despite inflationary headwinds contributed to record earnings for the 1/4. We also converted our record earnings to cash by generating quarterly cash flow from operations of $404 million, which is the highest first 1/4 amount in our history. We achieved this despite a more than $200 million increase in working capital, which is typical of the first 1/4 given seasonally higher sales volumes. We invested $66.7 million into the company through capital expenditures and returned $73.8 million to our stockholders through the payment of $56.7 million in dividends and $17.1 million in share repurchases at an average cost of $150.97 per share. Approximately $696 million remain available under our $1 billion share repurchase authorization, reflecting our confidence in our long-term strategy and outlook. I'll now turn to our second 1/4 outlook. We continue to remain optimistic about business conditions in the current environment, with solid underlying demand trends expected to continue in the vast majority of the markets we serve. As such, we estimate our tons sold will be flat to up 2% in the second 1/4 of 2022 compared to the first 1/4 of 2022. Further, we estimate our average selling price per ton sold in the second 1/4 of 2022 will also be flat to up 2% compared to the first 1/4, fueled by our diverse product mix and continued strength in the pricing for the majority of our products and the end markets into which we sell. Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $9-$9.10 for the second 1/4 of 2022. In closing, we would like to once again thank all of our Reliance colleagues for their contributions to these exceptional results. That concludes our prepared remarks. Thank you for your attention. At this time, we'd like to open the call up to questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Seth Rosenfeld with BNP Paribas. Please proceed with your question. Good afternoon. Thank you for taking our questions today. If I can kick off, first with a question on CapEx, I want to come back to a question on inventory management and margins. On CapEx, can you just give us a bit more detail on the new Texas semiconductor-related facility you mentioned in the prepared remarks? It sounds like that's driving the bulk majority of the CapEx hike. Can you tell us a bit more about the capacity or location of that, and the timeline for ramp-up? That'd be great. Thank you. Sure. Hi, Seth. How are you today? Yeah, that's an exciting opportunity for us, and we've been in that business a long period of time. That obviously there's a lot of reshoring going on that you've probably read about and heard about in the billions and billions of dollars located everywhere from places in Texas through Arizona up to Ohio, and I'm sure I'm missing some of them. It seems like there's a lot of that type of business coming back to the U.S., which is great. I think people got a little tired of that long supply chain, so we're finally doing something about it. That operation we decided to put it in Texas. It just makes more sense so we can reach all of those different states, as I mentioned. Our business that we do with those folks really hasn't changed. Now remember, we're not making chips, okay? We're making the plumbing that goes into the clean rooms and also the vacuum chambers and what have you. It's just a great opportunity for us because of our relationships with those producers. They've asked us to kind of step up our game along with them, and we're more than happy to do that because it's good business for us, and it has legs for a long period of time. Karla may have more. Yeah. Hey, Seth. A little more about the business, the operations there. One of our subsidiary companies that we've owned since prior to going public, Valex Corp, they do a lot of the electropolished stainless steel tubing and fittings that go into the construction and ongoing repair and maintenance of the semiconductor chip manufacturing plant. As Jim said, with the specific reshoring that's happening here, we see some great opportunity. We've had our location in California, which was the initial Valex location. Since that time, they've expanded globally. They have another operation in South Korea, one in China. That's where we've seen a lot of the growth, you know, over the last decade or two, but it's really exciting for us to see that coming back to the U.S. now with a lot of growth here, and we think that our company is very well-positioned. That is the biggest chunk of our increased spend there. We're looking forward to, you know, building a new facility to serve that expanding market, and are really excited about putting it in Texas and closer to some of our customers here. Okay, thank you. Just to clarify, I think in your remarks, you said that the cash outlay would be considerably below. Is that $260, $290? Did I hear that right? Yeah. As has happened in the last two years since the pandemic, you know, we're seeing a lot of opportunity to continue to grow. You know, our customers keep asking us to do more. We think some of the, you know, issues that people have been dealing with, whether it's labor shortages, you know, higher cost of capital, trying to streamline their operations. We're seeing more and more continued opportunity for us to do more for our customers. With the supply chain disruptions and the labor shortages, you know, we've seen extended lead times to be able to bring in a lot of the equipment that we're including in our CapEx budget. Our cash outlays used to more closely match our annual budgets. With these extended lead times, there's a little more of a disconnect now. That's why we put in the additional comments that the cash spend we anticipate will be, you know, lighter than what our budget is with some of this trailing into 2023. Great. Thank you. One separate question, please, with regards to inventory management and margins. You earlier commented on some recent gross profit margin compression, especially earlier in the 1/4, it sounds like as inventory costs began to near the replacement cost. Can you give us a bit more color on how that will develop into Q2? I think you commented earlier that the strength in stainless and aluminum began to aid margins late in the 1/4, and now with the strength in more carbon steel products, will that also aid margins sequentially as we think about the development, please? Right, Seth. Yeah. You know, during the 1/4, there was pressure on prices for certain carbon steel products in January, February, with the you know the crisis in Ukraine. We saw that reverse pretty quickly for those products in the beginning of March. That was where we were seeing more of the inventory costs catch up. Aluminum and stainless continued to increase pretty substantially during the 1/4. A little pressure on some aluminum prices now, but they're still at very high levels. You know, it'll vary a little bit depending on what's happening with that pricing. Because we continued to see the increases during the 1/4, and then they picked up again on some of the carbon products, that spread goes up again. Arthur, anything? Yeah, sure. Seth, just to point out, our FIFO margins or our reported margins are still, you know, near the high end of the sustainable range. Really, this is just a factor of just costs catching up with replacement costs and, you know, essentially maintaining that sustainable margin range. In terms of, you know, looking ahead, yeah, certainly there's some, you know, momentum on Non-Ferrous products. In our guidance, I implied somewhat consistent to slightly up gross profit margins for the second 1/4. Great. Thank you very much. Sure. Thank you. Our next question comes from Emily Chieng with Goldman Sachs. Please proceed with your question. Good morning, Jim, Karla, and Arthur. My first question just continues on the trend of cost inflation that you're seeing. Sounds like there've been a couple of headwinds, particularly relating to maybe diesel, power, labor, or some others, including packaging. My question would be, you know, how concerned are you here, or do you have a pretty good ability to pass on these pressures at a pretty quick clip through higher pricing to your customers? Yeah, well, I mean, it's part of doing business, right? You know, if it was easy, anybody could do it, Emily, right? But we've been at it a long time. When these issues come up, because our model and our diversification and geography and product and customers and all those types of things, we're able to you know, function just fine. It's just it takes a little more effort to do so, and we anticipate that to continue. We also, due to our model, we sell to the majority of our customers, they're not looking for the lowest price. They come to Reliance for service. They come to Reliance for Value-Added capabilities. They come to Reliance because they want us to be part of their long, ongoing business. We've modeled the way we run our company around that. You know, when you're dealing with the right kind of customers, they get it when the price goes up, and we perform just the way they want us to. We price the products we make and the service that we provide the right way. We're not bashful when it comes to charging for it. There's nothing wrong with making money. We're not a nonprofit organization, and neither are the folks that we get to do business with. Karla, you have anything you wanna add to that? Yeah, I think Jim hit it just, you know, the model we've been successful so far based on the results and passing this through. We have you know over the years and we have to adjust our pricing you know based on our input costs, our expense levels and you know what our customers will accept. We feel pretty confident right now continuing forward with increasing price costs. The only thing I would add, Emily, is the transactional nature of the business and the smaller order sizes help with this situation, so. Just one other thing. I know you didn't ask, but there's a, you know, it's difficult, you know, getting people and what have you. Our company's done really well in retaining really fine talent. I'm really proud of the folks out in the field and the folks at corporate. I believe it's because they work for a really good company. We go out of our way to pay attention to things like safety and being competitive and things like that. We're able to retain talent. Now attracting new talent, we have a whole lot of new methods to do that, and they're paying off, okay. We've got a lot of work to do. We have to continue to do that. It is just not just us, it's our suppliers and our customers. Our customers are having a hard time getting people. When they have a hard time getting people, that makes Reliance look even better because of our investment in capital expenditure, equipment and what have you, we can do a lot of work in our plants and they don't have to do it in their plants. That's something we're real proud of and something that we'll continue to focus on. Great. That's really helpful color. My Follow-Up is just around capital returns. Your free cash flow generation is still very robust, even during the 1/4, but did notice that the pace of buybacks had decreased from the run rate we'd seen in the second half of the year last year. How should we be thinking about the pace of repurchases throughout 2022? Has your announcement around increased growth spend taken away some of the priority from capital returns? Thank you. Good question, Emily. Yeah, I mean, it's certainly we have the capacity to be able to do it all. When it comes to capital allocation, we don't necessarily, you know, look at it on a quarterly basis or even an annual. A 1/4 or a year isn't necessarily gonna tell the story. For us, it's more of a longer term, you know, period for that. You've heard us say when you look at a Five-year, you know, period for Reliance, you know, shareholder returns have made up a little over 50% of our net income. We and then overall capital allocation, you know, is somewhat balanced. You've heard us say that before, you know, with growth accounting for about half and returns for the other half. Just to kind of put some numbers to it, over a 5-year period, we've returned close to $2 billion to our stockholders via dividends and stock repurchases. On the growth side, invested close to $1.8 billion in capital expenditures and acquisitions. That's how we think about it. We don't necessarily guide to you know, buyback activity you know, for the next 1/4 or the year. You know our practice, it's more long-term opportunistic and you know, it's all about being patient and you know, really capitalizing on the right opportunities. Great. Understood. Thanks. Thank you. Our next question is from Timna Tanners with Wolfe Research. Please proceed with your question. Yeah. Hey, good morning, guys. Hello, Timna. Good morning. Wanted to start out asking for some help on how to think about modeling the stainless and aluminum because just it's not as close to that. Stainless on a per ton basis, we have it falling pretty sharply 1/4-over-quarter. Sorry, stainless went up sharply and aluminum came down sharply even though aluminum LME prices were up. Just thinking about the trajectory going forward, do we think about like these prices moving with the commodity, or should we think about them being a bit more sustainable at recent levels because of your contracts? Just any guidance there on how to think about the revenue per ton would be helpful. Yeah. You know, that's a little tough for us to help you with Timna because we don't really model that way internally. I think one thing to remember on the aluminum side, you know about a large portion of the aluminum we're selling is heat treat aerospace plate, which doesn't always necessarily follow the LME aluminum pricing. There are some announced increases coming for those products. As you heard us comment on, and I think you've heard from others, we have seen improved activity levels there. We expect a lot of those products to be tight throughout the year, so, which is supportive of pricing. Even though there's been some pressure on the LME prices recently, we think that aluminum prices will, you know, remain steadied up for a good portion of our aluminum exposure. The stainless side, that one stainless is always a little more volatile than other products historically, if you look back decades. In the recent few months, it's been even more volatile than we've ever seen it. We think, you know, there's still some settling out to occur on the LME for nickel. We're not trading on that. We don't follow that. You know, our stainless producers, we feel, have done a good job of managing through this volatility during the 1/4 and trying to keep the cost at a reasonable level for us. That product has been tight for a while, and we see that continuing with the strong demand that's out there. Although we're at, you know, currently very high prices, we do see that being sustainable in the near term given the strong underlying demand. Okay. That's helpful. Thanks. Wanted to ask about your pretty nice containment of SG&A or selling, general and administrative. Quarter-over-1/4, it actually fell. In the past, it's gone up. With all the cost inflation commentary, it's pretty impressive to see that sustained. I guess the question is, you know, how possible is it to keep a lid on those costs as we look toward the rest of the year? Yeah. Good question, Timna. So, we saw the rate of inflation slow down sequentially for, you know, the fuel packaging, et cetera. You know, wages certainly, that's a different story, right? First 1/4, that's when you start. We have the annual cycle for, you know, vast majority of our folks in the company. Now, I think the one important story here is to recognize that our incentive, when you look at 2021, vast majority of our incentives are tied to FIFO profits. Yet at the end of the day, we'll report results that are on LIFO basis. Effectively, about, you know, if you think about LIFO expense in 2021, it was $700 million. Really, our incentives in 2021 were based on $700 million more of pre-tax income and gross profit. As we're headed into 2022, that's an important factor to consider when thinking about SG&A. That's somewhat playing into the sequential decline, but it's kind of hard from Q4 to Q1 to really tell you know see that story. That's why I'm pointing to kind of the overall year. Yeah, year-over-year, inflation is playing a factor. I mean, when you look at Q1 of this year versus last year, you know, inflation and delivery costs, packaging, plant supplies, et cetera, wages as well, that's what's primarily driving the year-over-year increase. Okay. Helpful. It sounds like you have some cost inflation from labor potentially, but other factors it seems like you're working to contain, or could we see some creep through from energy or other factors? I mean, that's fair. You know, wages, I think, you know, Q2 we'll see more, you know, full 1/4's worth of an impact from wage inflation in Q2. Like I said, sequentially, we saw somewhat of a decline at the rate of inflation. I'm not saying, you know, we didn't have any. I'm just saying the rate at which, you know, costs like predominantly fuel, you know, packaging, et cetera, were increasing, that slowed down sequentially. Gotcha. Okay. Thanks very much. Sure. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Our next question is from Phil Gibbs with KeyBanc Capital Markets. Please proceed with your question. Hey, good morning. Morning, Phil. The new investment in Texas on the semi side, is that basically, did you say that was a 1/4 of a billion dollars? I just wanted to confirm that. We did not say that, no. No. No, no. It's significantly less than that, Phil, but we said it was a big chunk of the incremental $100 million increase in the overall CapEx budget. Okay. I thought I heard $260 million. I didn't know what that was related to. Oh, sorry. All right. The $260 million, Phil, that was cash outlay we estimated. Our budget for this year, for 2022, our approved CapEx budget is now $455 million. We, because of the extended lead times, we tried to quantify what we think the cash spend in 2022 will be, which we'll be spending some cash for projects that were approved in last year's budget as well as in our 2022 budget. We estimated $260 million-$290 million of cash spend in 2022 for our CapEx, and then there'll be some of that pushed into 2023 for cash spend just because of the long delays in getting equipment and other things these days. Okay. That facility in Texas, just to stay there for a minute, how does that compare to the size of the facilities that you have in California and then overseas? Is it similar size, or is this a, you know, more meaningful investment in terms of footprint? You know, I wouldn't really look at the size. You're talking about the size of the building. The size of the building isn't that big a deal, to be honest with you. We have bigger ones. The way we're doing it, the technology today is really advanced and really expensive, by the way, but it's gonna help us in the long run. It's more of a very state-of-the-art. You don't need a lot of people to run it, a lot of kind of robotic type activity that'll be going on in it. We're gonna be real proud of this place. It's gonna be built well. The size, you know, it's not so much the size of the building, it's the, all the equipment and, things that go into the building. We've built bigger, more elaborate facilities throughout our, family of companies as well. This is a good one. It will have an increased capacity compared to our current U.S. location. Pretty similar, we've expanded actually both our South Korea and China operations for this company over the past few years, and so it'll be pretty comparable to those as an individual facility. Especially during this ramp with the significant announced build that's happening here, we'll be continuing in the U.S. to be able to operate in both California and Texas for a period of time, as long as we see the demand strength there to support that. It sounds like it's at least a 25% capacity add for you guys in this business. Whatever number you wanna throw on it. Well, we'll place that one in the box for now. The commercial aerospace ramp, I think you said there was a pretty big increase sequentially and year over year. Any way to frame that in terms of the size of the increase? 'Cause I think it was something that stood out in your release. Well, I think we didn't actually quantify that part of it, Phil. You know, if you remember our fourth 1/4 activity, fourth 1/4 of 2021, we had said that, you know, we saw some improved activity at that time. You know, we've been seeing our customers come in, like, sporadically with holes in their inventory. Starting in Q4 and continuing into Q1, you know, there's increased build rates happening, so that's affecting the whole chain. We're seeing our customers in that market buy more regularly now, both here in the U.S. and in our European and other global operations. That's the trend we've seen. Backlogs are also increasing. We think that we're not gonna be back to Pre-Pandemic levels this year, but that we're gonna continue to see a progression with steady improvement. Thanks very much. Thanks, Phil. Thank you. Our next question is from John Tumazos with Very Independent Research. Please proceed with your question. Thank you very much. Hello? Yeah. Hi, John. Early in the 1/4, the Midwest hot-rolled coil steel futures fell almost to $900, and then, of course, rebounded wonderfully after the sanctions. Your business didn't seem to suffer that price decline and just, you know, rolled along better than ever in the first 1/4. Which prices should we watch to understand your steel realizations? CRU or something other than the Midwest futures? John, I think, that's a question we've been asked for quite some time. You know, really the diversity of our product mix is part of our model that really helps us, you know, not be as impacted, you know, by a lot of that. We did with those price declines that were going on in carbon. You know, we certainly did see an impact, but hot-rolled coil is, as we said, only about 10% of our shipment dollars. But you know, we saw some of our other products. We actually had shipments in Q1 for like plate and carbon steel plate and structural tubing down. We think some of our customers were trying to wait out the price declines they saw. They thought that they might continue to fall. When prices reversed, we saw really strong bookings in March. That's just a little color around that for that part of our business. You know, we did see an impact from that, the carbon pricing expectations. I think because the rest of our business with our stainless and aluminum pricing, I mean, you've been following that with us for years. We ask people not to model us based on the HRC price because we don't think that's reflective. I think probably looking at our average selling prices from 1/4 to 1/4 and using that as a base to bake in your assumptions is probably better than any individual index that you might follow out there. Yeah. You know, John, those indexes that you referred to. They're basically spot indexes that trail the actual price. So I'm not. Like Karla Lewis said, we literally don't pay attention to it at all. We pay attention to what we can do for our customers and what they're willing to pay for as far as what kind of value add we can do for them. Again, you know our business very well. If somebody's gonna buy truckloads of plate or sheet, they're probably not gonna buy it from us, but if they want it delivered on time and in the form they want it, that's what they're gonna do with us. So the price will be whatever they're willing to pay at the time. Those indexes are. I'm not sure who uses those, but they're maybe contract folks. I don't know. We don't pay much attention to them. Thank you. You're welcome. Thank you. Our next question is from Phil Gibbs with KeyBanc Capital Markets. Please proceed with your question. Thanks. That was fast. The question I had was just on the new toll processing facilities that you have in Kentucky and in Texas, and whether or not those are starting to crank up or contribute, and what you're assuming. Not, you know, not assuming exactly in terms of a financial impact, but whether or not it's contributing to the guidance in the second 1/4. Well, you know, I mean, they're not. They're difficult to build mills, okay? Are they on track to go? Yeah, they'll be fine, but they're. They're a little bit behind as I believe those two guys that built those mills. I'm sure they're a little disappointed on how quickly they can bring those mills up. You know, we're. I'm not sure if we're factoring in the second 1/4 or not. We're hoping they can continue to ramp up. It's kind of a day-to-day, week-to-week type thing, but we don't have a lot of control over what they're gonna do. When we signed on to partner with them, obviously those types of partners and friends, we go for the long run. When they're ready and ramped up, we'll ramp up with them. I know we're ahead of them, so whenever they're ready, we'll start doing our thing. Yeah. In Kentucky, I mean, that one, you know, started earlier, so that has been positively contributing, not at the levels that we expect it to when the mill and our location are fully ramped, but it has been positive so far. Those are not big factors in, you know, our Q2 guidance. You know, with the size of the company and so many individual operations, while those are both very important to us, and meaningful, it's not a big factor in our guidance for the second 1/4. Okay. Just to follow up on toll processing. You're obviously a major supplier to automotive, both aluminum and steel. Automotive itself has been very choppy, tough to read. Lot of mixed signals, a lot of ups, a lot of downs, a lot of volatility like everything else. But what are you seeing and what are your expectations as the year plays out for automotive? Yes, I would say the biggest thing we hear from our folks in those businesses. It's that they've probably been operating with the least visibility that they've had in quite some time. You know, they're just reacting to support their customers. We think a lot of times, you know, a lot of it's week to week of what the impact is from chips or other, you know, supply chain issues. We think our operations have done well managing through that. They're able to move their business around with their multiple locations to support whichever platforms we need to. They've also seen a lot of opportunity to, you know, pick up other non-automotive business with their lines. Certainly, there's been a bit of an impact there, where, you know, we listen to other folks. It seems to be getting a little better, and we would expect that to continue to improve with what we're hearing from others. There's still a lot of uncertainty out there on that, Phil. Thanks, team. Appreciate it. Okay, Phil. Thank you. Thank you. There are no further questions at this time. I'd like to turn the floor back over to Jim Hoffman for any closing remarks. Yes, thank you very much for your time and attention today. Before we close out the call, I'd like to extend my gratitude to all of my colleagues throughout the Reliance family of companies for your contribution to yet another record 1/4. I remain inspired by your commitments to our operational excellence, continuous improvement, and most importantly, our highest core value of safety. We will be participating in the Goldman Sachs Industrials and Materials Conference in New York in May. We will also be participating in the KeyBanc Basic Metals Conference in Boston in early June. We hope to see a lot of you there. Thank you all very much for your continued support and commitment to Reliance. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.