Greetings, and Welcome to the Reliance Steel & Aluminum Company First Quarter 2023 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, Kim Orlando with ADDO Investor Relations. Please go ahead. Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's 1st quarter 2023 financial results. I am joined by Karla Lewis, President and Chief Executive Officer, Stephen Koch, Executive Vice President and Chief Operating Officer, and Arthur Ajemyan, Senior Vice President and Chief Financial Officer. 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 inflation, 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 31st, 2022 under the caption Risk Factors, disclosure in our press release this morning and 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. The company disclaims any duty to update the information provided therein and herein. I will now turn the call over to Karla Lewis, President and CEO of Reliance. Good morning, everyone, thank you all for joining us today to discuss our 1st quarter 2023 financial results. I'll begin with an overview of our performance and capital allocation strategy. Steve will then speak to our operating results and demand trends by end market, and Arthur will conclude with a review of our financial results and outlook for the 2nd quarter of 2023. Beginning with our 1st quarter performance, we started the year off strong as our highly diversified business model continued to yield favorable results in an uncertain business environment. Our 1st quarter net sales of $3.97 billion increased approximately 10% from the 4th quarter of 2022. Our sales benefited from solid demand in the vast majority of our end markets, with our tons sold up 17.7% from the 4th quarter of 2022, which were partially offset by a lower average selling price. This was the highest sequential increase from the 4th quarter we've seen in our tons sold in the last decade. Our strong volumes, which benefited from our investments in organic growth, a robust gross profit margin of 30.9%, and disciplined expense control, helped drive pre-tax income of $508.5 million and diluted earnings per share of $6.43, well ahead of our expectations. Our strong profitability, along with effective working capital management, enabled us to generate significant 1st quarter operating cash flow of $384.6 million. Turning to capital allocation, our consistent cash generation continues to fuel our strategy of investing in growth activities and returning capital to our stockholders. Our capital expenditure budget for the full year 2023 remains a record $500 million, with spend of $102.9 million in the 1st quarter and an expected total cash outlay of approximately $400 million-$450 million this year. We expect approximately two-3rds of this budget will be invested in growth projects, up from roughly 50% historically, as we continue to invest in various facility upgrades, efficiencies and expansion into new markets. Our investments include new cutting-edge equipment to expand our value-added processing capabilities to further bolster our market position and margin profile, as well as investments to provide safer working environments for our employees. While we did not complete any acquisitions during the 1st quarter, the pipeline remains healthy. We continue to evaluate a wide variety of prospective opportunities and remain well positioned to pursue those that meet our discipline criteria for high-quality growth. Concurrent with our growth initiatives, we returned $100.9 million to our stockholders in the 1st quarter through a combination of dividends and share repurchases. Since 2018, we have allocated over $2 billion of capital towards organic growth and acquisitions and nearly $2.8 billion towards stockholder returns in the form of dividends and share repurchases. In summary, we are very pleased with our 1st quarter performance, both operationally and financially. We continue to execute our strategy in a dynamic environment with metal pricing volatility, ongoing inflationary headwinds, re-recessionary concerns, supply chain disruptions, and labor shortages. Nevertheless, our managers in the field continued to do an excellent job upholding our superior levels of service and providing increasing levels of value to our customers. We maintain our belief that Reliance remains very well-positioned to capitalize on opportunities resulting from the infrastructure bill, the CHIPS Act, and the Inflation Reduction Act in an environment with relatively higher metal pricing versus historical levels. Thank you to our extraordinary team at Reliance for your commitments to working safely and successfully executing our model. Thank you all for your time today. I'll now turn the call over to Steve, who will review our 1st quarter operating results and demand trends. Thanks, Karla, and good morning, everyone. I'd also like to express my gratitude to our dedicated team at Reliance for their outstanding operational execution and ongoing commitment to safety. I'll now turn to our 1st quarter demand and pricing trends. Our tons sold increased 17.7% compared to the 4th quarter of 2022, surpassing our expectations of up 11%-13% and vastly exceeding the typical seasonal recovery. Compared to the prior year period, our tons sold were up 7.2%, higher than the service center industry increase of 5.5%, as reported by the MSCI. The performance was supported by our organic growth activities we've invested in over the course of the past several years, along with our end market and product diversification, broad value-added processing capabilities, and ability to service quick turnaround orders. Continued strength in the non-residential construction, general manufacturing, and aerospace end markets further contributed to our strong shipment levels in the quarter. Additionally, rising metal cost trends incentivized many customers to re-enter the market ahead of further price increases, which led to strengthened demand for our carbon steel flat roll products. Shipments for the other carbon steel products we sell also increased both sequentially and year-over-year. Our 1st quarter average selling price per ton sold of $2,623 declined 6.3% compared to the 4th quarter of 2022, exceeding our expected decrease of 3%-5%, largely due to shifts in product mix. Relative to the 4th quarter, the increase in carbon steel product shipments, which have a lower average selling price than stainless steel and aluminum products, contributed to a shift in our product mix, resulting in a lower realized sales price per ton sold. While our overall quarterly average selling price per ton sold decreased, pricing for most products we sell stabilized during the 1st quarter. It's also important to note that announced carbon steel flat rolled price increases were only partially realized during the 1st quarter, with more to come in the 2nd quarter. Arthur will cover our 2nd quarter 2023 outlook in more detail. On a non-GAAP FIFO basis, which is how we monitor our day-to-day operating performance, our gross profit margin increased by 190 basis points to 30.5% compared to the prior quarter due to better alignment of inventory costs on hand with replacement costs. I'll now turn to a high-level overview of the trends we saw within our key end markets. Notably, shipments improved both year-over-year and quarter-over-quarter in nearly every end market, with continued strength in non-res construction, general manufacturing, auto through our tolling operations, aerospace, and energy. While sales to the semiconductor industry declined sequentially, they remained at an elevated levels compared to the 1st quarter of 2022. Our long-term outlook for this market remains positive, and we will continue to make investments to increase Reliance's capacity in the semiconductor space to support the significant expansion of semiconductor fabrication underway in the United States. Separately, we will also continue to make investments in our businesses that sell into infrastructure and clean energy to support anticipated higher activity in these areas. Please refer to our earnings release for additional commentary on our end markets. Overall, we remain confident underlying demand will remain healthy across the majority of the end markets we serve in the 2nd quarter of 2023. I'll now turn the call over to Arthur to review our financial results and outlook. Thanks, Steve. Good morning, everyone, thank you for joining us today. As Karla highlighted, ongoing strong demand contributed to non-GAAP earnings per share of $6.37, well ahead of our guidance of $5.40-$5.60 per share. The stronger-than-anticipated 17.7% sequential increase in our tons sold also exceeded our guidance and accounted for the majority of the earnings per share outperformance. While our overall quarterly average selling price per ton declined from the previous quarter due to the entry point into Q1 being lower than the prior quarter average and a shift in our product mix, our selling prices remained relatively stable throughout the 1st quarter. In an environment of relatively flat pricing for the vast majority of the products we sell, we improved our transactional or FIFO gross profit margins, that's without the impact of LIFO adjustments, from the 4th quarter of 2022 as our inventory turn rate accelerated and costs on hand continued to better align with lower replacement costs. Additionally, we realized a significant amount of operating leverage on the incremental tons we shipped. These factors collectively contributed to the better-than-expected results for the 1st quarter. We recorded LIFO income of $50 million in the 1st quarter of 2023, compared to $99.1 million of LIFO income in the 4th quarter of 2022, and LIFO expense of thirty-seven and a half million dollars in the 1st quarter of 2022. Our current estimate of $60 million of LIFO income for fiscal 2023 remained unchanged from our previous outlook. As a result, we currently expect to record $15 million of LIFO income in the 2nd quarter of 2023. Consistent with historical practice, we will update our expectations quarterly to account for actual inventory costs and metal pricing trends. As of March 31, 2023, the LIFO reserve on our balance sheet was about $729 million, which will generate LIFO income and benefit future period operating results to mitigate the impact of potential declines in metal prices. Moving on to expenses. Our 1st quarter non-GAAP SG&A expenses increased $43.2 million, or 7%, compared to the 4th quarter of 2022, due primarily to higher incentive compensation associated with higher profitability, as well as higher variable warehousing and delivery expenses associated with higher tons shipped. On a year-over-year basis, non-GAAP SG&A expenses increased $43.3 million, or 7.1%, primarily due to incremental variable costs associated with higher ton shipped and inflationary wage adjustments, which were partially offset by lower incentive-based compensation resulting from lower LIFO profitability. Turning to cash flow. Despite about $100 million of working capital investment in the 1st quarter, we generated cash flow from operations of $384.6 million, supported by our strong earnings. Our inventory turn rate, based on tons, improved in the 1st quarter of 2023 to 4.9x, or 2.4x months on hand, up from 4.4x, or 2.7x months on hand for all of 2022, and exceeding our company-wide turn goal of 4.7x. Our days sales outstanding was approximately 40 days, in line with our so-historical range of 39-43 days. Our operating cash flow funded $102.9 million of record quarterly capital expenditures, and the return of $100.9 million to our stockholders in the form of $62 million of cash dividends and $38.9 million of share repurchases. As of March 31, 2023, approximately $641.8 million remained available on our $1 billion share repurchase authorization. I'll now turn to our 2nd quarter outlook. While we expect underlying demand will remain healthy in the 2nd quarter of 2023, we expect our tons sold will be flat to down 2% in the 2nd quarter of 2023 compared to the 1st quarter of 2023 due to one less shipping day in the 2nd quarter of 2023 and the absence of the demand pull-forward experience in the 1st quarter of 2023. We anticipate overall pricing to remain fairly stable, with slight upside from recently announced carbon steel price increases. Accordingly, we estimate our average selling price per ton sold in the 2nd quarter of 2023 will be flat to up 2% compared to the 1st quarter of 2023. Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $6.40- $6.60 for the 2nd quarter of 2023. In closing, we're very pleased with our solid start to the year with strong shipment levels, earnings, and cash flow, despite continued macroeconomic uncertainty. This 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 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 a speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we pull for questions. Our 1st question comes from Emily Chieng with Goldman Sachs. Please go ahead. Good morning, Karla, Arthur, and Steve. Thanks for taking my question. I wanted to ask around the shipment levels in 1Q and then the outlook for 2Q. I know you mentioned that there was some demand pull forward in the 1st quarter. Perhaps could you give us a sense as to if there wasn't this pull forward, what would shipments have been? As you look into the 2nd quarter, if there's no demand pull forward there, are you getting a sense that there's any indications of perhaps demand being pushed out given the macro uncertainty? Hi, Emily. Thanks for joining the call today. On the demand side, you know, we were very pleasantly surprised a bit with the strength of the demand pull forward or sorry, of our shipments during the 1st quarter. It was higher than our typical seasonality bounce back. Part of that, you know, we mentioned that related to some of our organic growth activities. We had a couple of our newer plants that are on campus with some of our good mill partners. With their ramp ups, we also benefited from more shipments out of those locations that contributed. Even, you know, without that and the pull forward, we had guided to a slightly stronger than normal seasonal bounce back. Because our customers, you know, continue to be busy, they're still struggling to find the labor they need, which extends, you know, some of the strength in their businesses for continued shipments. We're pleased with what we see. Q2 guidance, really we've got one less shipping day, so that's the majority of the guide, where typically our Q1 and Q2 are generally pretty flat historically. We had good strong shipments in Q1. We're looking for something similar to that in Q2, minus the one day and the little bit of demand pull forward we had with the dynamics on the carbon flat-rolled pricing in the quarter. Great. That's very clear. A 2nd question just around the end markets then. Has there been anything that has been impacted by some of the credit tightening that we're seeing? Have there been any signs of project delays or cancellations? It's been good to see some inflow from the infrastructure side, but curious if there's anything that, you know, you're seeing a little weakness there. Yeah. You know, we certainly understand that people have concerns and, you know, there's speculation that we're seeing that. We haven't seen it yet. We're not saying that we might not see some of it later in the year, but going into, you know, Q2, our customers have strong backlogs and projects are continuing. Thank you. Thanks, Emily. Next question comes from Timna Tanners with Wolfe Research. Please go ahead. Yeah. Hey, good morning, guys. [crosstalk] I wanted to ask, to follow Emily's question. We've heard from some of the smaller service centers that they're struggling with higher interest rates. Could you be, you know, perhaps gaining share if some of your competitors are having a harder time accessing capital? 'Cause it doesn't sound like that's an issue for you. Just wondering about that competitive dynamic. Yeah. Hey, Timna. We are not aware of that. We have heard, you know, some comments by people that some of the service centers may be struggling. You know, for us, that is an environment where it is typically favorable for us and, you know, our customers still seem healthy as well. If they're trying to manage, you know, their credit limits more tightly, that's usually favorable for us because of our smaller, you know, we're able to service smaller order sizes on a frequent basis. It does create a favorable environment for us, and we do pick up some market share sometimes in those types of environments. Okay. That's helpful. Alongside your mix, you mentioned the higher sheet prices. There's also been some big plate increases. I know you're decent in plate. But on the flip side, for long products, on the carbon side, you know, with scrap retreating a bit here, that could be an offset. I mean, is there anything I'm missing in terms of the moving parts? Because a flat to up 2% pricing number, seems to temper some of that enthusiasm we've seen on the flat-rolled side. Any, any other color on the components of that pricing guidance would be great. Hey, Timna. It's Steve. I'd have to say there's not really much to report there. Our long product business has been steady, prices have been steady. Demand has been strong, and we've not seen a pullback in demand or pricing. Yeah. Our mix too, Timna, can also impact that. You know, semiconductor, we're seeing a little weakness there right now, you know, our pricing on those products is pretty high compared to a lot of the other products, including like carbon flat-rolled or plate. The product mix can make a bit of a difference as well. That would be offsetting some of the sharp increases in flat rolled 2nd quarter over 1st quarter, is what you're saying? Yeah. Well, we saw some of it in the 1st quarter and would expect that to continue in the 2nd quarter. Yeah. Okay. Thanks. For my final question, I'm gonna take a stab at LIFO here. I was kind of surprised with the lack of change in the $60 million annual guidance given the stronger price environment at least of late. Can you walk us through, I mean, is that really a function of year-over-year lower prices? Does that reflect any thoughts on inventory year-over-year? If you could just- You know, talk us through why that didn't change despite some of the more positive dynamics you've laid out. 'cause I would have expected that could have converted to a LIFO expense. Thanks. Yeah, sure, Tim. This is Arthur. So from our perspective, I mean, you have to look at our product mix as well. You know, Karla just alluded to that earlier. carbon flat-rolled combined as a percentage of sales in the 1st quarter, less than 20%. You know, you have, you know, certainly some prices on the carbon side, you know, plate and flat roll that have come up, but there's some headwinds on the non-ferrous side. All in all, there wasn't anything sort of story changing, so to speak, from an annual cost, you know, forecast perspective. Also, when you step back and you look at a $60 million, you know, LIFO on nearly $3 billion worth of inventories, and that's FIFO basis, it's a relatively small number. Essentially, what we're saying is kind of relatively flat pricing, right, for the year, at least for costs on hand from the beginning of the year to the end of the year. Okay, that's helpful. Appreciate it. Thank you. Mm-hmm. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Phil Gibbs, KeyBanc Capital Markets. Please go ahead. Hey, it's Phil. Thanks so much. Good morning. Good morning, Phil. Can you guys hear me okay? Yep. Yeah. All right, perfect. Some pretty strong comments on aerospace in the release. Maybe give us some color in terms of what you all are thinking for the, for the balance of the year, because the rebound in Q1 sounded very strong. Yeah. Hi, Phil. You know, we've been seeing continued improvement in our aerospace business, you know, throughout 2022 and, then coming into the 1st quarter of this year. You know, commercial aerospace build rates, have been improving, and so we've benefited from that. Commercial is probably about half of our aerospace exposure. Then, you know, space, private jet, you know, defense have continued at strong levels. Overall, you know, we've been really pleased with what we've seen, and, our customers continue to be busy, and we expect that to continue, throughout the year. I may have missed it 'cause I did miss a portion of the script, but your CapEx expectations for the year on a cash basis, I think Q1 you did a little over $100 million, but what's the expectation for the, for the full year there? Yeah. Hey, Phil. We do still have some catch up from, you know, our spend over the last year or two because of extended lead times, a lot of the equipment manufacturers and, you know, just constructing new buildings and things. We estimate that we'll spend cash of about $400 million-$450 million in 2023. We did have, you know, $100 million, as you mentioned, spend in the 1st quarter. We are seeing some of those lead times start to come in a little bit, we're anticipating some improvement in that area as we progress it through the year. Thank you. Just lastly, I know Timna asked the question on share gains. I think you did intimate that there was some of that in your 1st quarter in your release. You know, maybe talk a little bit about that more and if it's something that could be meaningful to you all this year in the sense that, you know, hey, is it a couple hundred basis points? Is it more than that? Is it less than that? I mean, anything that you could provide there would be helpful. Thanks a lot. Yeah. You know, we mentioned that we do have a couple of new facilities, some of our organic growth that have been ramping. We're seeing some higher shipments based on that activity. Our, you know, tons shipped were higher than the MSCI industry average, so that would imply that we are taking a little share. You know, we've got great people out there throughout our organization who are hungry, and they like to sell metal. You know, we may be taking some share. We don't have a specific plan. We haven't quantified anything. We've got the capability to ship more tons if we get, you know, reasonable profits on it. Thanks so much. Have a great day. You too. Thanks. Thanks, Phil. Next question comes from Martin Englert, Seaport Research. Please go ahead. Hello. Good morning, everyone. Morning. Morning, Martin. Wanted to get your thoughts on. You spoke about underlying demand, you know, looking into 2Q here, but looking past that, do you have any thoughts or expectations in the back half of the year, and maybe how that compares to the prior year? Any color commentary maybe from, you know, some of the customer base on their expectations or their budgets? Yeah. Hi, Martin. You know, our customers, I don't know if we look that far out, you know, 40% of our orders, the customer calls today, we ship tomorrow. The sentiment from our customers are that they continue to be busy. You know, they're not getting as much labor, that their workforces are down a bit, so they still have orders that they're working to fulfill. Beyond Q2, you know, we're not sure. There are a lot of uncertainties out there. We do think though, and we mentioned in our comments, you know, you've got the combination of reshoring of some manufacturing business. You've got the infrastructure bill, which, you know, it sounds like a lot of the mills are starting to see some activity from that. We typically trail the mills a bit. We think that's a positive indicator for us, along with, you know, activity on the Inflation Reduction Act and the CHIPS Act. You know, we're expanding some of our capacity to be able to meet that demand. As we just commented, you know, aerospace has been strong. Our tool processing for the automotive business has been strong. No quantified outlook for the 2nd half, but we feel good about 2023. Okay. I guess, kind of along the same lines, and you did touch on this, where there was maybe some pull forward, as buyers stepped off the sidelines in 1Q here. Any other color on how buying activity among the customer base, when you think across different metals products, is today versus how it transpired in 1Q? Are there any differences or divergent trends when you think about that activity, carbon versus other metals? Yeah. Martin, you know, there was the pricing dynamic for carbon flat-rolled during Q1 with the price increases. you know, there were quite a few increases. They're pretty significant. As mentioned, there have been some plate increases, so we think some customers may have bought ahead a bit. We commented on that as a factor in Q1. It seems like prices are stabilizing a bit now, and we expect kind of normal buying patterns in the 2nd quarter. Any indication that this would pivot from a restock to a destock across the supply chain? Rather, I guess, what you're saying, in my read, on what you're explaining, is not necessarily that it's more so, yeah, there was some pre-buying and maybe some restocking, but now it's just kind of stabilized. Is that right? Yeah. You know, Martin, we don't run our business to restock or destock. We run our business to focus on our customers' needs. As I mentioned a few minutes ago, you know, a lot of our business is next-day-type delivery. You know, and our inventories are in very good shape. And we think throughout the industry, inventories are in pretty good shape. We don't anticipate any big changes in buying patterns as we move into the next quarter, for us or, you know, for our customers or competitors. Thanks. If I could one more. Any additional color on the semiconductor weakness mix shift there? Yeah. I think, you know, we're seeing a bit. Shipments are still at strong levels. We're still higher than, you know, year-ago levels. The industry had been at record levels, and there's been a little bit of a pullback. We think there was maybe a little bit of a glut. Some customers maybe had more inventory than they needed for the slowdown that has been seen, and that's really, for us, related to selling metal into the equipment manufacturers, feeding into the semiconductor industry from a semiconductor kind of infrastructure, so to speak, which is the other part of our semiconductor business. With all the spending that's been announced in the U.S., we see that business continuing to be steady to stronger. We think it's just a temporary situation long term, both from the expansion of the chip-making capabilities in the U.S. and the demand for chips, we think is gonna be very strong on a long-term basis. Okay. I appreciate all the detail. Congratulations on the results. Okay, thanks, Martin. Thank you. Since there are no further questions, I would like to turn the floor back over to Karla Lewis for closing comments. Thank you. Thanks again to all of you for your time and attention today. Before we close out the call, I'd like to remind everyone that we'll be in Boston in late May, attending the KeyBanc Industrials and Basic Materials Conference, and in Chicago in mid-June, presenting at the Wells Fargo Industrials Conference. We hope to see many of you there. Thank you again to our team at Reliance for your continued strong performance so far in 2023. Thank you to all of you for your continued support of and commitment to Reliance. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.