Welcome to the final presentation of our iron ore and steel stream. It is absolutely my pleasure to have with us Reliance, who's actually first time at the conference in several years. It's really exciting to have you guys here. And representing Reliance, we, of course, have Karla Lewis, who's President and CEO, and Arthur Ajemyan, who's the CFO. Both of you, welcome. Thanks for having us. Thank you for being here. Where I'd like to start to maybe just kind of set the stage is, can you walk us through Reliance's priorities for 2024 and objectives, and where we are year to date in terms of achieving those? Sure. First, like, who in the audience does not work for Bank of America? Like, thank you for showing up at 5:30 P.M. today. We appreciate it. So, thanks, Lawson, for having us here. I did suggest they serve drinks. Maybe we would've had a few more people here, but maybe next year we'll put that on the agenda. If you come to Barcelona, we'll have drinks for your presentation. Okay. Done and done. Anyway, you know, thanks, everyone, for the time. As far as Lawson's question, 2024 objectives, you know, we're pretty consistent at Reliance with what we think we've done and try to do and continue to do, building the company for the long term, which is, you know, really trying to improve our business day to day. You know, if you don't know Reliance, we're a service center. We're the largest in North America, but we really differentiate a little bit by focusing on smaller customers and smaller order sizes. Last year, our annual revenue was $15 billion. Our average order size was $3,200 an order, so we're doing a lot of transactions. 40% of those customer orders today, we deliver tomorrow, so we run a pretty decentralized company, to be able to service our customers that way. So it's continuing to focus on servicing those customers. Our customers, over the past, 8-10 years, have been asking us to do more value-added processing for them. So we really had, stepped up our investment in value-add processing as we see continued opportunities from our customers. So our, CapEx budget this year is $440 million. That's hundreds of different items in the CapEx to do more of that value-add processing that we continue to build on, to continue to increase our gross profit margins. We also have grown quite a bit through acquisitions. We just... We've completed 3 acquisitions so far in 2024, with the last one being our 75th acquisition since our IPO 30 years ago. So continuing to try to grow the business both organically and through acquisition, as well as returning, you know, value to our shareholders through dividends and share repurchases. So that's kind of our capital allocation bucket. I think, you know, what are we doing a little differently and, you know, specific to 2024, but again, it stays very consistent. You know, we also now in our company are talking more about smart, profitable growth, which means... You know, there was a period where we only went after the really high-margin business, and we said, "You know, don't, don't go after kind of that medium to low-margin business." And we're, you know, focused on retaining the high-margin business, but also, you know, getting a little more throughput, especially with prices declining a bit, through our existing assets. We can take some of that medium-margin business to still supplement our earnings. And also, our companies, you know, we're a family of companies, and typically, they really focused on their specific business. And we talk more about collaboration now and having our companies, you know, work more together, going after opportunities together to improve the overall profitability of Reliance. And, you know, of course, we also just have our continued focus on keeping our employees safe. Yeah, that's fantastic. I wanted to address the name change as well. Yeah, I guess initially, what's the feedback been from your investors in terms of the name change? But then, I think more importantly, what does the name change ultimately mean to the folks at Reliance, and what does it mean to all the different family offices that make up Reliance? Yeah. So, we were Reliance Steel & Aluminum Co. since our founding in 1939. Very proud to be Reliance Steel & Aluminum Co. This year was our 85th year in business. But, really from our investor base, long-term shareholders over the years, you know, it first started with many of them saying, "You know, why, why doesn't Reliance get a higher multiple? You outperform a lot, most of the companies you're compared to in the metal space. No offense against any of the other metals companies, but, you know, they said, maybe we look at you more like an industrial distribution company. You know, we think you should have a higher multiple." And so we started to reposition ourselves a little more in our discussions, our investor materials, shareholders that we met with, to drive our multiple up. I think we've had some success with that. And the other thing, you know, that the investors said along with that was, "Can you please drop steel and aluminum from your name? Because, you know, some people won't look at your company because they don't invest in metals. We think you could get a broader reach by doing that." You know, being there for 32 years, it was kinda hard for me to drop those names, but we felt it was the right thing to do, and response from investors has been positive. You know, we listen to you, we take the feedback. Internally, you know, one of the things to know about Reliance is, with all of these companies we acquire, running in a decentralized manner, we leave the name in place. We buy good, well-run companies who have a good reputation, a strong position in their market, so we don't change their name to Reliance. They continue as whatever, you know, their brand has been for all of those years. So didn't mean a lot to them. We actually didn't have any operating companies under Reliance Steel & Aluminum. We have some Reliance companies, but we actually had a much more positive internal response than we anticipated. It was a little bit of like, you know, we're a little old school, our industry is a little old school, so it was felt as, you know, maybe a little more progressive Reliance moving into the future. So it actually created a lot more excitement than, than we had anticipated. Oh, that's great. I wanted to touch on M&A. You addressed it in your opening remarks. Thank you. It was a good starting off point. You actually addressed a lot of things in your opening remarks- All right. -that I'm probably gonna come back to. But after a fairly long hiatus in 2022 and 2023, aside from one small acquisition, year to date, you've done three that total nearly $500 million. Can you maybe speak to how the M&A environment has changed, for example, on the bid-ask spread, and whether or not maybe there's more willingness to sell, given the more challenging environment? And just speak to maybe the dynamics of that. And then, most importantly, I think, for everybody here is: What's the outlook going forward? Yeah, so, Reliance's appetite for acquisitions has always been high, but it has to be the right companies at the right value. We feel we're pretty disciplined when we look for acquisition opportunities. And so, you know, there have been periods, maybe a year, where we have not completed an acquisition. It's not because we weren't looking, it's not because we didn't want to acquire good companies. We either just didn't see companies that were the right fit, or maybe we were interested, but valuation expectations, you know, were different. At Reliance, the way we've consistently valued acquisitions, you know, and because we're in the business, we understand the different market dynamics that occur. So we try to look at, you know, peak and trough for that target company based on the products and end markets they're selling into, and then we come up with what we believe a normalized go-forward pre-tax income, EBITDA number is, and we value off the normalized number. So we don't value off of projections, we don't value off of trailing 12 months. We come up with that longer-term view because we acquire companies for the long term. And, you know, things were really nice and a little crazy in the pricing environment in 2021, 2022, so we saw a lot of sellers, who were hopeful to have us think those pricing levels were gonna remain forever. We've been in the business a little too long to believe that, so it was harder to agree on valuations. We've seen some of those companies come back around because they weren't able to get the numbers that they were looking for at the time. As far as, you know, kind of deal flow opportunities out there, I think people do have more realistic expectations on value now. We've also seen companies that probably kind of fit Reliance a little better, in the last year to two. You know, a lot of these are companies where the owners are reaching retirement age. It's a generational turn, and Reliance is an attractive home for their good business, their good employees, that have grown with them over the years. And so we anticipate more activity, but we never know when or who. You have a very strong balance sheet. The acquisitions you've done year to date have been more bolt-on, given your relative size. Is that because of a lack of availability of large transactions, or is it just that you're shying away from large transactions and preferring a more bolt-on type of approach? ... So we are not shying away from large transactions if they're good companies that fit Reliance. Not every company that sells metal is a good fit for Reliance. So, you know, there are some good public and private, larger, you know, multibillion-dollar revenue companies out there that could be attractive to us. But the majority of the companies in our space are kind of the family-owned, small to medium-sized businesses, especially, again, back to our model of focusing on the smaller customers, smaller order sizes. We see that more in the model of a lot of the family-owned companies, more so than some of the larger chains. Not that there aren't any, but- Understood. I wanted to come back to the name change and just ask if there's an implication or read-through from the name change that you might be interested in other metals as part of your business? Well, I mean, we're involved in a lot of metals already. You know, we don't talk about, but we've got some high-end, like zirconium in one of our small companies, and some other exotic metals there. We do a lot of titanium, brass, copper. I mean, we do touch a lot of different metals. You know, but the name change is not signaling that. Like I said, we're, you know, proud of what Reliance has done. We wanna continue building. You know, with one of our recent acquisitions, American Alloy, you know, they do PVQ carbon steel plate. Not that exotic, but something we didn't carry in our portfolio before. So, you know, we are often expanding products a little bit, but we are not looking to take a right turn and go in a different direction from, you know, where we've been. So no uranium? You never know. Well, we, we have a couple of companies that sell into the nuclear market. They're not selling uranium. But, yeah, we'll leave that maybe to some of the other folks to handle. And I wanted to—you touched on CapEx in the beginning, so I wanted to step off from your comments on CapEx. I mean, they have been elevated in sort of the last 2-3 years, your level of CapEx spending. A lot of that's been associated with value-add product, of course. But just based on your conversations with customers and the end market outlook, how long do you see that elevated level of CapEx persisting? Yeah, I mean, we've for the last few years, we thought, "Gee, we're probably not gonna see this much opportunity again next year," but then we see it. Our CapEx is built from the ground up at, you know, each of our operating locations. What do they see with their customers? You know, they make their requests. At corporate, we go through it and decide where to allocate the dollars. But if it's a good business opportunity for us, and it's a team that can return, we're generally supportive of that. Some of the increased dollars, quite honestly, is inflation related. It just costs more to do everything. You know, whether it's a piece of equipment or a greenfield, the actual cost is higher. You know, like I said, we keep thinking it'll slow down, but we continue to see opportunity. A lot of our customers, especially, again, the smaller companies, you know, that processing equipment, maybe they already do that in their shop, but the new equipment's a lot more expensive. It's harder to find labor, train the labor to do that. You know, with our size and scale, we can, you know, we could run that same piece of equipment for multiple customers, making it more cost-efficient. We also... You know, throughout Reliance, we already have people generally running that type of equipment, so we can get up and running faster by our internal resources training. Okay, that makes a lot of sense. I just wanted to mention to the folks in the audience that if you have a question, we are more than happy to take it. Just raise your hand, and we'll get to you as quickly as possible. I wanted to ask about- Sorry. Thank you for taking the time. Just update on the macro conditions. How's demand versus, like, what, you know, in a booming or normal market is? And what sort of end markets are, you know, doing better or worse, and what's your outlook? Yeah. So, for quite a while now, I don't think we've known what a normal market is. There's always something happening. But overall, you know, we're not booming in most industries, but we're healthy. Our biggest end market is non-residential construction, and we would throw infrastructure and some of, like, the renewable energies in with that market. That's probably 35%-40% of our sales dollars. You know, Reliance, and in the service center industry, we're generally not selling the large volumes of metal direct for, like, skyscrapers and the large projects. We deal more in, like, the five-story and below buildings. So, you know, we've been, you know, pretty active. Schools have been active, data centers, medical facilities, even airports, stadiums. You know, these smaller projects, we're still seeing new activity. Building for manufacturing facilities with the reshoring that's happening has been a very strong market. I don't know if I mentioned data centers continues. You know, things related to, you know, solar, wind. You know, electrification, power grids. We've seen a little bit come from the infrastructure bill so far, mainly bridge work. But there's, you know, it's very early in the actual spend on the infrastructure bill. You know, there are the big semiconductor chip manufacturing plants going in. We're participating in selling, you know, some, like, structural metal into the building of the facilities. We also have kind of a specialty company selling into semiconductor. They do the ultrahigh purity gas systems. So when the new chip manufacturing plants come up, this is the clean electropolished stainless steel tubing that they'll pipe the gases in through. So, you know, it's not a huge market, but it's a very good market, so we're expanding capacity with a greenfield in Texas to support that growth. So, you know, that's positive for us. Plus, you know, once these big chip plants are built, then there's all the infrastructure of their subcontractors, their employees. So we think there's, there's a lot of good activity to come from that. Automotive, we approach that market a little differently. At Reliance, years ago, we looked at that the auto market and the appliance market. They're big consumers of metal, but typically, you have to lock into, like, an annual fixed sell price to them, and you can't get a supplier to lock into that. So we do very little contractual business. We stayed away from the direct material sales to them, so we don't have to take on the price risk, but we do toll processing. So on behalf of the producers, we're inspecting the metal, we're edge trimming it, we're blanking it, we're lubricating it, we're storing it, we're delivering it to the automaker, and that's very high volume for us, and we've been expanding. Auto's good for us. We've been increasing our volumes there. And in particular, our company that does that here in the U.S. handles aluminum. And so with the higher aluminum content going into autos now, we've been expanding their operations and seeing a lot of growth there. Aerospace is a good market for us. About 10% of our sales, about half of that is, like, defense and space, which continues to be strong. On the commercial side, build rates at certain of the airplane manufacturers aren't what had been anticipated. So, we're expecting, you know, a bit of an inventory glut in that supply chain, which will slow down activity for us and others until they catch up. Semiconductor, you know, that's been in near to the last year, again, there was an inventory glut there as well. People overbought and, you know, with some of the export markets changing, people are trying to rightsize that. We feel we're close to that market correcting. Long term, still very bullish on that. Also, long term, still very bullish on aerospace. The order books are there. Then general manufacturing would be a lot of different things that we touch. You know, ag equipment's been down, consumer products has been down, but I think we've seen a little improvement in industrial machinery. Arthur, anything to add there? No, I mean, I think, general manufacturing has been contracting for some time, and maybe there's some signs of, you know, expansion in the last couple of months, so, the ISM index, et cetera. So, and to Karla's point, industrial machinery, we're seeing some military applications in that, in that space, that hadn't been a trend up until recently. So, you know, there should be, you know, some positive momentum there, hopefully. You guys touched on two businesses, actually, I'd really like to ask about, and particularly in the context of your smart, profitable growth. So you're gonna take slightly lower margins to drive like absolute EBITDA growth. You have some interesting businesses that have far higher margins. Is the idea that those businesses can help offset some of the margin and ultimately kind of maintain gross margins? And the two businesses I'm particularly thinking of are tolling. Obviously, that's been a big driver of gross margins for you. But what about the high purity gas semiconductor business? Is that a business that can grow very quickly and materially impact margins? So, what was the first part you asked? So the context being just the sort of- The smart, profitable growth. smart, profitable growth. Yeah. And that potential negative impact on- Yeah gross margins, and then, and then what are the businesses that can offset that? And Yeah I'm particularly curious about those two. So the smart, profitable growth should not... Doing it right, the way we intend to, and we're setting targets with specific companies of ours of how to look at that, they need to maintain, and they're incentivized to maintain that high-margin business, but also show some growth going after reasonable margin business. I think in 2023, we definitely demonstrated that. We outperformed the market from a shipment level, so we took some market share, but we also maintained our gross profit margin in that 29%-31%, at the high end of the 29%-30% range. So I think we're doing well and trying to balance that. You know, tolling, those are good margins in the tolling business because, again, we don't have the metal price risk. Semiconductor, the ultrahigh purity gases, it's a great business. It's a really high-priced product, and we're close to manufacturing in certain products. We do some valves and fittings, some manifolds, and that. The market isn't huge, and we have a pretty good spot. We're specced into most of the projects. You know, there, but there will be more MRO. And that business started in the U.S., but we kind of followed some of the semiconductor chip plant growth. So in the early 2000s, we opened a location in South Korea, which we've grown a couple of times, then went into China. We've grown that business a couple of times. Now, our main investments right now are back in the U.S. Okay. This was amazing. Thank you so much for being here. Thank you, everybody, for listening in, and have a great rest of your conference. Great. Thanks, everyone.