All right. Good afternoon, good afternoon, everyone. Thanks for being with us today. Karla, Arthur, Steve, thanks a lot for the time. We have the whole Reliance crew here today with us, which is great. Can we start with the beginning, please, Karla, and provide a brief introduction to the company for the people that are not familiar with the story, please? Great. Of course. Yeah, and thank you to Goldman Sachs and to you for having us here today. And thanks to all of you for joining us here. So we'll try to tell you a little bit about Reliance and answer whatever questions you have. So, Reliance, we're the largest metal service center company in North America. We really operate as a lot of smaller companies. Currently, we have about 315 locations, primarily in the U.S. We are the most diversified metal service center company. We have a really broad array of products. Carbon steel is a little over half of our business, but we've got a good presence in aluminum, stainless, and then several other, you know, copper, brass, et cetera, titanium. We've purposely grown the company to be very diversified. We think that helps mitigate us from volatility of metals pricing, as well as selling into cyclical end markets. So we've been focused on that. We think that serves us well. Since our IPO in 1994, we've acquired 72 companies, so we've really grown the business. Last year, 2022, we were about a little over $17 billion in sales. We focused a lot on selling to smaller customers and smaller order sizes. We do have direct OEM business, but we really try to focus on customer service. And, with that $17 billion of sales, our average order size was about $3,700 an order. So our people are working hard out there throughout the field. It takes a lot to service that order size, and 40% of those orders, the customer calls us today, or emails us, however they contact us, and we deliver it tomorrow. So a lot of really quick turnaround business. 50% of our orders, we perform some level of value-added processing, generally kind of first stage processing, to change the size or the shape of the metal so that it fits more easily into the customer's production line. And with that model, they're willing to, you know, pay a bit of a premium for that. We really think we're providing value to our customers. The last, you know, eight or so years, we really had to focus on increasing the amount of value-added processing that we perform for our customers. A lot of that because they've been asking us to do that. Better equipment, in our view, started coming out where we could, you know, get a tighter tolerance, a smoother edge. That can take some of what our customer has to do to the metal out of their production phase, so it's of more value to them, more efficient for them to have us do it for them. So historically, we had performed value add on about 40% of our orders. As I said, that's up to just over 50% now. And with that, the company's gross profit margins have been steadily climbing as we do more value add. You know, historically, we were kind of 24%-26% gross profit margin range. You know, now we're our sustainable range is 29%-31%. So we think we've gotten our return on those investments in that value add processing equipment. We also at Reliance, we, you know, buy in the spot, sell in the spot. We have very little contractual business. A little bit in, long-term contracts in commercial, aerospace, and defense, but other than that, generally spot. With that, we try to turn our inventory better than the industry and, you know, so that we can react to changes in that, effectively manage the working capital. So we think we've, you know, done a good job at that. Very consistent cash flows, you know, kind of non-cyclical cash flows as well. If there's a downturn, we reduce our working capital, and if there is a downturn, and unfortunately, we've had to exercise this a few times with our scale and the number of service centers we have, if we do get in an over-inventoried situation in one of our operations, we can funnel that out through other of our companies. So you know, that kind of gives us an advantage over smaller service centers out there and allows us to manage that better. We do operate our own fleet of about 1,700 trucks. So that's also a competitive advantage that allows us to deliver those small order sizes to our customers. Also to be able to support those characteristics we talked about, we're very decentralized. We try to put the decision-making as close to the customer as possible and allow them to know their customers and to react very quickly. So I think that's [crosstalk]- Yeah, great summary. Reliance. Thanks a lot. Obviously, M&A has been a core part of this strategy for the past few years, right? Most recent one being Southern Steel. I think 2022 was a quiet year for you. 2021 was a big year as well. So I mean, walk us through, please. How has been the integration with these acquisitions? How do you manage to integrate them all? How should we think about that going forward and the level of consolidation in a market that is clearly not consolidated enough, right? So how do we get to a more optimal levels going forward? ... Yeah, so I mean, I feel like I've worked pretty hard on 72 acquisitions so far, but we're still just under 15% of the market. So it continues to be a very fragmented market with, we believe, a lot of opportunities still out there. We don't want everything that's out there. Our model is to buy good, well-run companies and make them better. You know, criteria, they have to be immediately accretive to earnings, have strong management teams, you know, high integrity, focus on customer service, and we see a lot of teasers for acquisitions. There are a lot we don't move forward on. We also don't want to compete with our customers, we don't want to compete with our suppliers, so that weeds out a lot of the opportunities we've been seeing. But there, there's a lot out there now that is attractive. I think valuation expectations are getting a little more reasonable from our view. And you know, we've been able to reach agreement with many sellers over the years. You know, Southern Steel, we did acquire earlier this year. It's going well. It's a pretty small company. It was strategic for us, for one of our existing companies who wanted to expand into that geographic market. It broadened Southern's product mix. And you know, when we acquire a company, because we are pretty decentralized, you know, there are some things, financial reporting, cash management, et cetera, that we work with them on right away. Safety, their standards, typically, most companies aren't up to ours, so Steve and his team spend time there improving safety. But, you know, a lot of the employees in the company don't realize that there's been a change in ownership. They continue to operate as Southern Steel. We are going to, over time, make them better at how they go to market, how they operate, make them more efficient. So, you know, integration with the way we do it is usually pretty smooth. We've, you know, seen that there. And some people think because we didn't do any acquisitions in 2022, it's because we reprioritized where we wanted to invest our capital, but that's not the case. You know, our balance sheet's in very good shape. We look at four capital allocation buckets, and we think growing the company for the long term is kind of the best use of our capital, whether that's organically or through acquisitions, because we think we can continue to build and improve upon those investments. But at the same time, we want to return capital to our shareholders as well. But we've been, you know, fortunate that we can- we could exercise all four of those buckets, but it just depends when the right opportunity is available. You know, we don't want to do a bad deal. We're only gonna go forward on an acquisition if we think it's the right investment for Reliance, whether that's organic growth or acquisition. So our appetite never changes. We're always working on potential acquisitions, but we don't always find the right fit. Right. Makes sense. I was gonna ask about product portfolio, and if there was an intention to go further downstream or maybe into the upstream operations, but it feels like there is no, right? If you don't want to compete with clients or suppliers, that's where you draw the line. Yeah, that's correct. But we do, we have acquired a couple of small fabrication companies, which would be a little more downstream, but, you know, they've been in kind of out-of-the-way parts of the country, where we're not competing with our existing customer base. And at the same time, as I mentioned, a lot of our customers have asked us to do more for them. Yeah. So as we bring more of the value-added processing equipment in to do that for our customers at their request, we are going a little further downstream, but it doesn't look like we're, you know, going out, and we're not, right? Going out to take share from our customers. Right. Okay. You did mention that balance sheet is quite robust, as, I mean, if you turn up 0.1 x, net debt EBITDA. Buybacks have been quite aggressive as well in the past few years. You mentioned the four buckets. I'm guessing it's growth, buyback, dividends, and, Well, it's four growth.- It's four. Count us two. All right. Okay. Yeah. So I mean, how do you prioritize each of those four buckets? And what is the ideal net leverage you want to have? 0.1x seems too low, or are you just-- You want to keep it low to be ready for potential targets? Yeah, we used to say that, right? We wanted to be able to be opportunistic, but, you know, really with where we are today, we don't think we have to choose. We think we can do all four of those, but Arthur, do you want to talk about it? Yeah, sure. So we don't take necessarily a short-term view on that. And, we take, you know, being a cyclical business, we take a kind of longer view, you know, five years, you know, plus. So if, you look at our, returns and, you know, growth investments over the last five years, returns, dividends, and share buybacks combined have made up a little over 50% of our net income and, close to 55% of free cash flow. Does that mean every quarter or every year, that's where we're gonna be? No. It's just, you know, the business, like I said, is cyclical, so we just take a longer view on that. And, you know, but does that does that mean we're always gonna be sort of balanced between growth and, and returns? You know, no, it just depends on opportunities that are available, that are in front of us. So, some periods we might, you know, tilt more towards returns, and some periods it, you know, the allocation may tilt more towards growth. Okay. Makes sense. Maybe going back a little bit to the current landscape we have today, you mentioned we have 15% of the market share. I think the second largest peer has probably less than half of that or a third of that. What do you think is the ideal setup in terms of how many players, and how long it's gonna take for us to get to a level where, you know, the top five have at least 50% or 60% of the market? I know it's potentially decades away, but it feels like we are trending towards that level, right? Yeah, I think it could take a while. Yeah. To get to that level here in the U.S. Like we said, there are a lot of good companies out there, and, you know, a lot are family-owned. We are seeing, you know, as, as people get to the end of their careers, they may wanna, you know, a liquidity event, because the family may not be in the business, and that's, that's been the case for quite a while now. But we continue to see that. You know, we also hear from smaller companies that, due to various factors, it's getting more and more difficult, more and more expensive for them to participate. Yeah. So, you know, we're a good, a good exit for them. As I mentioned, you know, we talk about the well-run, successful companies. You know, we feel we treat them the way they would like to be treated as a seller. We leave their name on the business. We operate under several different brand names, and it's important for a lot of those families. And we're paying a value for the reputation they've built, for the way they service their customers, for their integrity, and we wanna maintain that. We don't wanna go in and destroy value that they've created. But we do think, you know, whether it's just through buying power of being part of our size, you know, some of the financing costs, back-end healthcare, where we can provide some advantages to them. But as you know, the mill world has consolidated, you know, we hear from smaller companies, they feel it's a little more difficult for them to feel important and, you know, being a part of it. But we really think the biggest value that we bring to the companies that become part of the Reliance family are all of our other family members that are out there. Because they can share information with each other, they can learn from each other, share their expertise, different ideas about ways of doing things, and really bring best practices to the companies. Also, you know, we'll push the companies. Maybe the family, they didn't wanna. They see opportunity, but they were a little nervous about levering up to buy some expensive equipment or, you know, to add another location. With our resources, we're able to kind of push them to do that. It excites the rest of their team that's there, and, you know, being in a growth mode is good for morale. Yeah. You know, really positive. Steve, you? Yeah. I mean, we like to listen to our customers, see what we can do to add value to the supply chain. We 95% of our purchases are domestic, so we watch our domestic suppliers, where they're adding capacity, what needs do they have, so we can kind of, you know, be part of their solution. So between our customers, and our suppliers, and our employees, we wanna grow in a thoughtful, calculated way, as opposed to just thinking about overall market share. Yeah, that's good. How do you think about your working capital strategy? Because Karla did mention that you buy on spot and you sell on spot. Volatility has obviously picked up for commodities prices, so there might be a mismatch when we get certain level of volatility, right? How do you manage to really work around these volatile scenarios to make sure that your inventories levels are not too far from where the spot prices are? Yeah. So really, again, we focus on turning our inventory quickly. I think Steve just mentioned our, you know, really buying domestically, that we think that helps us manage our inventory better. You get shorter lead times, so you're not as, you know... You're a little more risk-averse because of a shorter lead time. It's we really talk a lot in our decentralized operations about the local intelligence. Our people locally decide which products they're buying, how much of it they're buying, you know, who they're buying it from. You know, it's within their control, and we hold them accountable through their compensation program. Our managers, our local management teams at each of our locations, they not only have to drive profitability, but they have to manage their working capital because their comp is based on their pre-tax income return on those manageable assets. Yeah. We feel that's how we can hold them accountable, and that that's pretty effective with the way, you know, we've structured it. I think, you know, Karla alluded to this earlier, our business model is designed to handle volatility. Yeah. And manage through pricing cycles. Given our small order sizes, transactional nature of the business, next-day delivery. Yeah. ... You know, arguably, we have better pricing power than you would if you had firm pricing, right? And that allows us to capture more value, you know, in a kind of peak to trough through a cycle than you would if you had kind of locked in prices on the buy and the sell side. Makes sense. You mentioned that 95% of what you buy, it's from the domestic market. Is that an opportunity to increase international exposure or imports, or just, just part of the strategy, really, to keep the high level of domestic sourcing? ... Yeah, we think we've had the domestic sourcing for years. Actually, you know, Reliance goes back to 1939, and I think in the 1970s, when they were a much smaller company, they did more import, and that's the only year in our 84-year history we lost money. So we're a little gun shy on that. We do remember, some of us remember that. I wasn't working there then. But, but we feel that the domestic buying really does help us manage the inventory. We, you know, we wanna know what's going on,- Yeah. -In the import market. Certain products aren't produced here, so we do have some import, but we really think, again, it's just better for our model, to be predominantly domestic. All right. Can we talk a little bit about the band? And I'm not sure if you want to break down per product or, maybe per item, but, but, sorry, per end user. But, how is it in the current landscape? I think we've seen steel companies here over the past couple of days, and they all presented a very interesting outlook, to say the least, all related to nearshoring, reshoring, and obviously energy transition. So how do you think about that and the differences between what you're seeing now and maybe a more structural outlook? Yes, I'll start, and then you guys can kind of chime in. So, I think we're probably all more bullish than any of you in the audience are. You know, we still see our customers being busy in most markets. It is a little spotty where certain, you know, of our customers, certain parts of the business are seeing a little weakening. But, you know, when we meet with Wall Street, I think starting earlier this year, because there finally was actually an interest rate again in the U.S., everyone thought non-res construction was just gonna stop. And, you know, we've seen it continue. In our space, in the service center space, and in particular, Reliance, you know, we're typically doing the smaller projects. It's usually, like, four- to five- story buildings and below. We're not. We'll do a little bit on the big skyscrapers, but most of that's, you know, mill direct. So we've seen our customers continue to have new projects, be busy. You know, like some of the big distribution centers fell off a bit, some commercial buildings, office buildings, but we've continued to see, you know, data centers, hospitals, schools, airports, manufacturing types of buildings, which ties into the reshoring. We are seeing, you know, real examples in a small scale of manufacturing coming back on shore. Obviously, there's the big scale with the chip manufacturing, battery plants, et cetera, that's also going on. So non-res construction, we think, you know, we've seen a couple project delays. Again, they're smaller projects, but we think that's gonna be okay, but we might see a little pullback as we go into 2024. Overall, we're still positive on that. We think there's a lot of activity to come, and a lot of our products that we sell into to that market also go into infrastructure, and that's just starting. The money's, you know, just getting ready to start to be released. We've seen, you know, pretty minimal activity from the infrastructure bill right now. We think that's going to continue to incrementally increase. The Inflation Reduction Act, we actually saw spend from that start earlier, and we think that's because they did it in the form of a tax credit. So those, and mainly renewable energy projects, could start much more quickly, but that's still early in the IRA. It takes a little longer on the infrastructure to get the funding approved, and with the CHIPS Act, that's just, in our view, good for manufacturing in general because when they build the huge fab plants, then they've got to have the infrastructure support for their subcontractors and for their employees around that, and that's where we, you know, participate, as well as directly participating in semiconductor, including the ultrahigh purity gas systems that go into those companies for their clean rooms. So we think there's a lot of good activity there. Aerospace has been a growing market. We see that continuing to grow for us. A lot of opportunity there, both commercial aerospace, also defense and space. There's growth going on there. Automotive, we purposely don't really sell metal directly to the automotive industry in large quantities, but we process a lot of metal for them. We call it toll processing, so we don't take ownership of the metal, so we don't have any risk from metal price fluctuations. So typically, the steel or aluminum producers are our customer, and so we charge them a fee for us to inspect it, you know, edge trim it, slit it, blank it, deliver it to their customers, store it for them. So that's a really good, very consistent, you know, earnings and cash flow business for us that we've been in for a long time. We've grown a lot in that business, in particular, with the increased aluminum content in automotives. It's really hard to handle and process and handle surface-exposed aluminum, and our, you know, company here is very good at doing that. So, the auto manufacturers and the producers are excited about having our company work with them on that business. Automotive, our processing for that is up this year as the auto build rates increase. We think it stays relatively healthy subject to any big pullback in consumer spending if the economy, you know, worsens from where we are today. You know, general manufacturing, we kind of sell a little bit to everybody. So that's where we've really seen mixed messages. You know, for the most part, most of that has been strong, but we did talk about in Q3, we saw some pullback on ag equipment, consumer products, and some industrial machinery. And we expect we're gonna continue to see certain customers, certain geographies, certain end markets continuing to strengthen or hold steady while we see some weaken. But that goes back to our strategy of being very diverse, so that overall to Reliance any impacts mitigated. So Steve, you wanna add anything? Yeah, I'd just like to say, so we have a very supportive board. They've approved $1.7 billion in CapEx over the past five years. We haven't been able to spend all of it because of extended equipment lead times, but 315 locations, 50 operating businesses, we are ready for business. And whether we're shipping to a machine shop or a job shop or structural fabricator, they're busy. And whether they're building, you know, a school or a hospital or data center, they don't really care where that business comes from. They're busy, and we try not to watch the business news, and, you know, we are, you know, gonna just keep running our business and, you know, moving forward and maximizing all the, the facilities and capabilities that we have. Any specifics on the aluminum market, b ecause it doesn't seems to be as strong as the steel markets, right? You said, does not? It does not. Does it? Yeah, so we would say in the aerospace-related [crosstalk]- Right. Aluminum products, it's strong. You know, both pricing and demand. You know, common alloy, general engineering, right, a little pullback. Semiconductor, is hitting that. We think long-term, you know, semiconductor demand is there. There's just a little too much inventory in their supply chain right now that we think will work its way out through 2024, and, you know, long term, we're very bullish on that. Yeah, and we watch our suppliers. I mean, they're opening up new capacity, so they're looking out five, 10, 20 years. So they did the research. They're investing the money. Yeah. We have a lot of confidence in our outlook on the market. What's your appetite to replicate whatever the strategy you're doing within the U.S., in other regions outside of the country? Yeah, so we feel we've been pretty successful in the U.S. We know the market, but we also know the supply chain. You know, decades ago, the producers also owned the distribution channel, and then they realized they weren't, that wasn't their bread and butter, right? That it was higher cost with their union wages and legacy benefits, and so they really spun off their distribution businesses. So the U.S. market, we think, works pretty well with having the service centers in there. You know, other parts of the world, Europe, Brazil, the producers still kind of have their own distribution channels as well. We've looked at opportunities from acquisitions, and the profitability levels are just different. Yeah. B ecause they're competing with the producers. So we do have some international operations. Typically, it's in specialty products, specialty end markets with high-quality standards. So generally, outside of North America, we're in aerospace, energy, and semiconductor. We can make reasonable profits there. We're continuing to grow those businesses, and we'll look for more opportunities, but to kind of be a general line service center in some other parts of the world, the profitability levels just don't meet our standards. Makes sense. You did mention that the new structural profitability guidance is now 29%-31%, versus 24%-26% before, if I'm not mistaken. What was the main reason behind it? It feels like it's the right acquisitions helped, but did you manage to get to be more efficient, running, like, thousands of smaller companies in one big headquarter? How do you manage to become more efficient, i s there room to be more efficient in that as well? Well, there's always room to be more efficient, and we hope we'll continue to do that in all parts of our business. But really, that step up, the sustainable part of it is, we believe, our increased value-added processing, right? So we're investing a lot through our capital expenditures into value-added processing equipment. We think, you know, we know we need to show a return on investing in that, and we think that step up in gross profit margin, you know, demonstrates that we are getting the right returns. So, you know, we're able to charge for that value-add service that we're doing and, you know, we bought the equipment, but just because we bought the equipment didn't mean we were getting higher gross profit margins. You know, there was a whole kind of training and mindset that, you know, Steve and his team had to spread throughout the company so that our salespeople understood they should be charging more because they are doing more for their customers, right? We're not taking advantage, but we're providing more value to them. So we had the investments, but then we had to bring along the pricing discipline to go with that, and that's really where we see the sustainable part. We also, you know, because we are a bigger company, you know, we've got the same piece of equipment operating in multiple locations. Sometimes it takes a while to train your operators,[crosstalk]- Mm-hmm -To become efficient on that. So we're able to, you know, leverage our companies to help each other to get there a little faster than, you know, maybe we would be if we were on our own. Okay. ... We are running out of time. I want to check if there is any question from, from the audience. Please. Yeah, thank you for the presentation. You are a just-in-time supplier to your customers. I wanted to get a sense if the higher rate environment what is that doing for your customer purchase orders? And are you carrying more inventory on your balance sheet to support them? Or any anecdotals that you have from on that? Thanks. Yeah. So, you know, we've for different reasons, right? We operate through different cycles, and when it, you know, either because metal prices are going up or borrowing rates are going up, when we see our customers needing to maybe more tightly manage their credit lines or their working capital, we're more attractive to them. Because maybe it's a company that would buy from the mill, and they would, you know, need to buy two or three months' worth of inventory at a time to meet the mill minimum. And now they need to manage that credit and capital more closely. So if they can call us and get a week's worth or a day's worth, and we deliver it to them much more timely, we generally see, you know, more people coming to us during times where it's a little tighter. You know, we've seen some of that already. You know, how much does it move the needle? I don't know, but... We hope then that we service them so well that even when things loosen up, they keep buying from us. I'm sorry, and we're not carrying extra inventory because we've got the relationships with the mills. We're buying domestic, and so we've got the ability to replenish our inventory. We don't have to really beef up to do that. Any other question? Maybe one last one from me. Do you have a view on prices? Where do you think prices are heading? Some will go up, and some will go down, right? You know, you know, that's kind of what we do as, as from a service center standpoint. We did with our fourth-quarter guidance, you know, we did say that, well, we felt there could be some more pressure on certain products. And for instance, like, carbon steel plate, held up pretty well, throughout 2023. We've seen some, you know, downward moves more recently, but not really unexpected. Same with structurals, have been pretty steady. A little pressure there. You know, hot rolls, flat rolls going back up again. Stainless and aluminum have kind of been on a more downward trend, but in our guidance, we said we thought that we were, you know, close to reaching trough, and/or stabilizing for a lot of the products. You know, it's a mixed bag because we handle so many different products. You know, overall, we think generally probably stable to hopefully increasing overall next year. Yeah, I mean, we support U.S. manufacturing, and they are investing, and they're not investing in new capacity, whether it's stainless or aluminum or carbon, to the value, the product. So I think for the long term, that there's an upward bias, with wage inflation, just the overall cost of everything that, you know, in the supply chain, we don't think that prices are, you know, gonna hit the levels that they hit in past cycles. Okay. That's great. Thank you very much.