Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Universal Stainless & Alloy Products, Inc. third quarter 2022 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone keypad. At this time, I would like to turn the conference over to Miss June Filingeri. Ma'am, please begin. Thank you. Good morning. This is June Filingeri of Comm- Partners, and I also would like to welcome you to the Universal Stainless conference call and webcast. We are here to discuss the company's third quarter 2022 results reported this morning. With us from management are Dennis Oates, Chairman, President, and Chief Executive Officer, Christopher Zimmer, Executive Vice President and Chief Commercial Officer, John Arminas, Vice President and General Counsel, and Steven DiTommaso, Vice President and Chief Financial Officer. Before I turn the call over to management, let me quickly review procedures. After management has made formal remarks, we will take your questions. Our conference operator, Howard, will instruct you on procedures at that time. Also, please note that in this morning's call, management will make forward-looking statements. Under the Private Securities Litigation Reform Act of 1995, I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission. With the formalities complete, I would now like to turn the call over to Dennis Oates. Denny, we are ready to begin. Thanks, June. Good morning, everyone. Thanks for joining us today. The third quarter proved to be particularly challenging, and frankly, the negative impacts to these challenges more than offset the favorable underlying trends in our business. Let me start with the major items on the plus side. Bookings of $66 million remain solid, on par with a strong second quarter, and marked the third highest quarterly order intake on record. Robust aerospace demand was the main driver. Our premium alloy sales are $8 million or 17% of sales, remaining on a near-record-setting pace. Our backlog increased 11% to reach a new record of $246.3 million, including $73 million in premium alloys or 30% of the total backlog, up from 26% last quarter. All cleanup and repairs related to the second quarter liquid metal spill have been completed, and our electric arc shop is operational. Our capital program is proceeding as planned. We're adding two additional VAR remelt furnaces in North Jackson, which are scheduled to be operational late in the second quarter of 2023. The investment supports our strategy to expand our product portfolio with more technologically advanced, higher margin premium products. We amended our credit agreement to increase our financial flexibility in funding the production needs being driven by our growing backlog. Unfortunately, the third quarter challenges outweighed the progress we made. In line with our announcement from last week and as reported this morning, shipment volume in the third quarter was 19% lower sequentially due to 3 factors. The residual effects of the liquid metal spill at our Bridgeville melt shop in the second quarter, the ongoing labor shortage and supply chain challenges resulting in intermittent production outages at key facilities, and an unfortunate spike in COVID cases at our Dunkirk test lab late in September, which curtailed final testing and product certifications necessary for shipping. In short, these factors combined to disrupt product flow, interfere with plant productivity gains, and reduce shipments in the third quarter below expectations. Additionally, a sharp decline in commodity prices during the quarter resulted in a negative misalignment between product surcharges, material costs, and revert values totaling approximately $1.5 million pre-tax. Let's take a closer look at how those challenges flowed through our income statement in the third quarter. Net sales for the quarter were $46 million, which is 11% lower sequentially. We estimate that $4.5 million did not ship due to operational disruptions. Net sales were up 24.3% versus the third quarter last year, and year-to-date sales of $146 million are up 30% from the same period of 2021. Third quarter premium alloy sales of $8 million were down 9% from the 2022 second quarter, but represented 17% of total sales. Premium alloy sales were up 35% from a year ago and rose 33% year-to-date to reach $26 million or 18% of sales. Despite the lower third quarter sales, we see accelerating growth in the market as evidenced by our growing premium alloy order book and increasing OEM approval activity. Gross margin in the third quarter slipped to $3 million or 6.4% of sales, and included $600 thousand dollar benefit from the jobs grant received under the AMJP program, $2 million in expenses related to the spill after effects and operating challenges, and $1.5 million in negative misalignment between surcharges and total material costs. Second quarter of 2022 gross margin was $4.7 million or 9% of sales, including a $1.8 million dollar benefit from the AMJP program, offset by $3.6 million in costs related to the liquid metal spill. The net loss for the third quarter was $1.3 million or $0.14 per diluted share versus a loss of $1.4 million or $0.16 per share in the 2022 second quarter. Third quarter EBITDA totaled $3.1 million and adjusted EBITDA was $4.2 million. Let me add a few points about our financial position before we go to Steve's report. Managed working capital totaled $147 million on September 30, in line with $148 million on June 30, 2022. Total inventory was $159 million at the end of the third quarter of 2022 versus $149 million at the end of the 2022 second quarter. Within inventory, raw material inventories were reduced $3 million or 13%, while work in process inventory increased $11 million or 10% as electric arc melting production doubled over the spill impacted second quarter. Third quarter capital expenditures were $5.5 million, and we expect CapEx to approximate $5 million-$7 million in the fourth quarter, mainly for expansion of the premium product capability at our North Jackson facility. Total debt on September 30, 2022 was $86.6 million, up $3 million sequentially. Subsequent to the end of the quarter, we announced an amendment to our credit agreement, which provides a total of $10 million in added liquidity and flexibility to fund our growth. Let me turn to commodities for a moment. Prices of virtually all commodities used in our operations fell significantly during the quarter, with scrap being the most pronounced, declining almost 39% as a result mainly of reduced carbon mill production schedules. Nickel was down 12% from the end of the second quarter and appears to have moved into surplus. Other commodities' third quarter price drop were largely double-digit, ranging from 15%-30% down. Falling commodity prices drove reductions in surcharges on the order of 20% between June and September. Looking at October trends, we see relatively stable surcharges in October and November, with further decreases in December. Turning to operations, the liquid metal spill in the second quarter caused a seven-week shutdown of melting operations as we cleaned up and made repairs to our electric arc shop in Bridgeville. Our team did an excellent job recovering and securing outside ingot supply. Nonetheless, rather than increasing production to meet our rapid backlog growth, melt shop production fell by over 40% during the second quarter, creating a sizable hole in the front of our manufacturing system. Third quarter melt production doubled, increasing every month of the quarter, but we were unable to flex up downstream operations sufficiently to keep product flowing smoothly at a higher rate. These two obstacles being the labor shortage and supply chain issues with key parts and consumables. For some perspective, we currently have about 460 hourly workers at our four locations. This compares to 400 a year ago, and we currently have a need for about 560 employees. We're addressing a portion of the shortfall with increased outsourcing and contractors. Since Labor Day, I am pleased to report that applications have increased, and we are focused on recruiting, onboarding, training, and developing the workforce. I should also mention that we are currently negotiating a labor contract in Dunkirk, which expires on October 31. Discussions are ongoing and progressing in due course. Supply chain issues, specifically long lead times and unreliable deliveries, continue resulting in rolling unplanned outages as we wait for parts. That said, we can report improvement. For example, all of our remelt furnaces are now available for production for the first time in over a year. Our mobile equipment fleet is in much better shape. We have purchased repair parts and spares heavily where the opportunity exists to minimize future disruptions from supply chain issues. Construction of our VAR remelting facility is progressing as scheduled and within budget. Equipment deliveries are still expected in the first quarter of 2023, with initial testing scheduled to begin in the second quarter. These remelt furnaces will support the growth we are seeing in premium products today, along with future growth from new approvals. Let's turn to end markets, beginning with aerospace, our largest market. Aerospace sales represented 69% of sales, totaling $32 million, down 11% from the second quarter, due solely to the production obstacles that impeded our shipments. Third quarter aerospace sales were 42% higher than the third quarter last year and increased 48% to $97 million in the first nine months of 2022 versus the same period a year ago, demonstrating the ongoing turnaround we're seeing in the aerospace market. The fundamentals driving the aero strength are in four basic areas. First, increasing air travel. IATA reports domestic air travel up 27% year-over-year, reaching 85% of pre-COVID levels. International growth jumped 116%, excuse me, but remains about 35% below pre-COVID levels. Second, airline profitability is growing. For example, Delta recently reported record revenues through the third quarter, as well as a double-digit operating margin. The only caution from airlines seems to be short-term shortages of material and skilled labor, especially pilots, and a growing shortage of jets. Again, for example, through August, Boeing has only delivered 7 737 MAXes to United versus a promised 53. Third, deliveries and build rates are increasing. Boeing is struggling to stabilize production due to supply constraints, getting new hires up the experience curve, and engine availability. They have been planning to increase 737 MAX production to 38 jets per month in the first half of 2023 and 47 by the end of the year, but they have struggled to meet these goals. They are struggling to meet these goals. Another challenge facing Boeing is achieving FAA certification for the dash eight, dash nine, and dash ten with a statutory deadline of December 31st of this year. Boeing has delivered 112 planes, up from 85 in the third quarter of 2021, and reported 328 deliveries year-to-date. September order activity was also strong, with 90 net orders. Year-to-date, net orders were 428 planes. Boeing closed the third quarter with a gross backlog, that is, unfilled orders of 5,236 airplanes, including 4,200 737s and almost 500 787s. Somewhere between eight-11 years of production, depending upon your assumption of current production rates. At Airbus, September deliveries total 55 aircraft, bringing year-to-date net deliveries to 435. Airbus booked 13 orders in September, with 647 net new orders year to date. Business jet demand is projected to total 8,500 new jets from 2023 to 2032, which is up 15% from last year's forecast. While usage is expected to increase another 9% in 2022. Last but not least, higher defense spending. The Ukraine situation, increased defense spending by all allies, planned replenishment of U.S. equipment, and increased training for U.S. readiness all point towards higher defense spending. Just to summarize, the prospect for aerospace and defense demand remain compelling, notwithstanding some of the supply chain issues and recessionary concerns we hear about. That's good news for our customers, and it's also good news for us. The heavy equipment market remained our second-largest market in the third quarter of 2022, with sales of $6.2 million or 13% of sales, which is 14% lower than the second quarter and off 18% from the third quarter of 2021. Year-to-date heavy equipment sales totaled $22 million, or 15% of sales. Metal fabrication demand drives our sales to the heavy equipment market, especially automotive. The lumpiness we saw in second quarter sales continued in the third quarter, as customers who bought heavy at the end of last year remained cautious amid economic concerns and recent trends in key commodity prices. That said, Fitch Ratings, for example, is forecasting that U.S. auto production will be sustained at current levels or possibly increase in 2023, even assuming a mild U.S. recession next year. That's based on the fact that industry production volumes are already at low levels due to COVID mitigation measures and component shortages. Dealer inventories are still below OEM target levels, with only 32 days of supply at the end of the third quarter, versus 66 days at the end of third quarter 2019 before the pandemic. Meanwhile, model changeovers are continuing, including for hybrids and especially electric vehicles. As a result, we continue to expect heavy equipment market shipments to recover modestly over the next few quarters, helped further by industrial equipment demand. The oil and gas end market was our third-largest market in the third quarter of 2022, with sales of $3.7 million or 8% of sales. That compares with $4.7 million or 9% of sales in the second quarter of 2021, when oil and gas sales were the highest since 2019. Year-to-date sales of $12.7 million were up 15% from the same period of 2021. The oil and gas market continues to send mixed signals. IEA recently noted that disruptive market forces are multiplying as the growth trajectory of oil supply through the remainder of this year and next year has been derailed by the OPEC+ plan to sharply curtail oil supplies. Meanwhile, their outlook for oil demand has been reduced due to downgrades in global GDP growth, with recession expectations in several European countries. On the other hand, Baker Hughes and Schlumberger see the same factors from a different perspective. Baker Hughes feels that despite current economic challenges, they remain constructive on the outlook for oil and gas and believe that underlying fundamentals remain supportive of a double-digit, multi-year upturn in global upstream spending. Domestic rig counts are up 229 from October of 2021, while the international rig count is up 92. Meanwhile, Schlumberger recently called out an urgent need for increased investment to rebalance markets, create supply redundancies, and rebuild spare capacity. On balance, the sentiment in the oil service industry is increasingly bullish, and the prices and demand for natural gas continue to rise. Based on our customers' inventories and our backlog, we expect modest improvement in activity as we move through the fourth quarter and into 2023. The general industrial market became our fourth-largest market in the third quarter of 2022, with sales of $2.2 million or 5% of sales, an increase of 21% from the 2022 second quarter and up 4% from the third quarter of 2021. Year-to-date sales increased 15% to $7.4 million. Our general industrial market includes sales to the general manufacturing markets, especially semiconductor equipment and medical markets. On the last call, we said we expected third-quarter sales to exceed 2022's second quarter, and we hit that target, as evidenced by a 21% increase in our general industrial sales. This was achieved despite reduced consumer demand for smartphones and personal computers. In fact, the Semiconductor Industry Association reported that global semiconductor industry sales in August increased only slightly year-over-year and decreased 3% from July of 2022. Looking at our fourth quarter, we expect general industrial sales to be in the same range as Q3's healthy level. Power generation market sales totaled $1.6 million or 3% of sales in the third quarter, which is down 30% sequentially, but up 83% from the third quarter of 2021. Power gen sales are up 47% year-to-date. Demand for maintenance of industrial gas turbines used in electricity generation continues to account for most of our power gen sales. While electricity in the U.S. is forecast to increasingly come from solar and wind, the U.S. Energy Information Administration on their October report estimates that 2022 natural gas will fuel 38% of U.S. electricity and approximately 36% next year. As a result, we expect sustained maintenance demand over the coming years, although varying with seasonal fluctuations. That concludes my remarks for now. Let me turn it over to Steve for a deeper dive into our financial performance. Steve? Thank you, Denny. Good morning, everyone. Our sales for the third quarter was $66.2 million, which represents an 11% decrease sequentially and an increase of 24% versus the third quarter of 2021. The decrease versus Q2 was first a result of various operational challenges encountered that restricted our ability to get orders to the finish line and out the door in Q3, many of which were caused by lingering impacts of the liquid metal spill that occurred in April, and second, due to a drop in the surcharge component of our selling price. Setting aside the surcharge decline, pricing for all of our major product categories increased in Q3 versus Q2, reflecting further capture of our six base price increases previously announced this year. Third quarter 2022 gross margin totaled $3.0 million or 6.4% of sales, a decrease from 9.1% of sales in the second quarter, and an increase from 6.2% of sales in the 2021 third quarter. The decrease versus Q2 is due to the negative surcharge misalignment and spill impacts that Denny described, as well as a smaller benefit from the AMJP grant within the numbers. The increase versus Q3 of the prior year reflects higher pricing and higher plant activity levels, which better cover fixed plant overhead costs in the current period. Our Q3 gross margin included $600,000 of a favorable impact from the AMJP grant that we were awarded in the first quarter earlier this year. We have recorded a total benefit of about $3.4 million in 2022 thus far, and there is no further P&L benefit expected in the future. Profitability in the current period was again unfavorably impacted by the previous liquid metal spill, which caused negative impacts to gross margin of $2 million in the third quarter and net negative impacts to adjusted EBITDA of $1.5 million after considering the incremental insurance recovery recorded this quarter. After adjusting for the impact of the grant and the spill, gross margin for the quarter would approximate 10% of sales. Further, the misalignment of our surcharge pricing and our total material costs held back margin by an additional 320 basis points in Q3 when compared with Q2. The spill costs of $2 million include higher material costs realized on late melt, increased internal labor, contractor and vendor spending related to catch-up activity, margin lost on shipments that were either late or missed entirely within the quarter due to the production impacts of the spill, as well as the impact of disruptions in productivity and gross production levels caused by lingering spill issues. In the second quarter, the immediate expense impacts of the spill were partly offset by the receipt of $1.5 million of insurance proceeds. In Q3, we recorded an additional $500,000 recovery within other income. Future cash received under the claim will be recognized within other income when received. Selling, general, and administrative costs in the third quarter totaled $5.3 million or 11.4% of sales, flat to Q2, and an increase of $270,000 compared to the prior year third quarter. For the nine-month period ended September 30, SG&A expenses are up 1% in 2022 versus last year. We expect SG&A expenses to approximate $5.5 million in the fourth quarter. Our reported operating loss for Q3 was $2.3 million, lower compared to our expectations and a reflection of the lower volume and gross margin achieved this quarter. Total interest expense for the quarter was $1.2 million compared to about $870,000 in Q2 and $540,000 in Q3 of last year. Interest expenses continued to increase along with higher market interest rates and higher borrowing levels on our revolving credit facility. The interest paid on the majority of our revolver and our term loan is variable, and it fluctuates with changes to benchmark interest rates. The primary benchmark rate in our credit agreement was updated in October as part of our recent amendment, which I'll describe further in a moment. During the second quarter, we recorded an income tax benefit of $1.6 million on our pretax loss in the quarter, and net loss was $1.3 million or $0.14 per diluted share. The third quarter per share loss after adjusting for impacts of the AMJP grant and the liquid metal spill was approximately $0.07. Our third quarter EBITDA totaled $3.1 million, and our adjusted EBITDA includes add backs for non-cash share compensation, the spill impact net of the insurance recovery and the grant benefit, and it totaled $4.2 million. The EBITDA and adjusted EBITDA calculations are provided in the tables of the press release. I'll move to cash flow and liquidity. We generated $2.7 million in cash from operations in Q3, despite using $10 million to grow inventory in support of our record backlog as our Bridgeville melt shop returned to full operation for the quarter. Additionally, cash used for our capital expenditures increased in the quarter, totaling $5.5 million. Therefore, free cash flow was a burn of $2.8 million, and our bank debt increased about $2.5 million in the third quarter to help fund those inventory and CapEx needs. Total debt at the end of the quarter was $86.6 million, and revolver availability was $22 million. Given the near-term increased cash requirements of our business as we ramp production levels in an inflationary environment and approach completion of our strategic Vacuum Arc remelt expansion project in North Jackson, we executed a targeted amendment of our credit facility with our existing lenders to provide additional liquidity as we navigate the next couple of quarters. The amendment has two main effects. First, it provides an additional $10 million in liquidity and financial flexibility. Second, it eliminates LIBOR as the main benchmark rate in our agreement, replacing it with SOFR. This secures our liquidity position as we focus on a successful Q4 and look forward into 2023. That concludes the prepared financial update. Denny, I'll turn the call back to you. Okay, thanks, Steve. In summary, our post-pandemic recovery, characterized by sequential quarterly sales growth and margin expansion, was interrupted in the third quarter by residual effects of the liquid metal spill in the second quarter, double-digit declines in key commodity prices, and ongoing labor and supply chain disruptions. Demand is excellent overall, largely driven by rebounding aerospace markets. Bookings are strong. Order backlog reached a new record high of $246 million. Growth in premium alloy products is accelerating. The positive impact of the six base price increases announced over the past year will increase as we move through the fourth quarter and into 2023. Electric arc melting activity increased each month since June, validating the outstanding job done by our team to clean up, make repairs, and restart operations. Applications for hourly employment are measurably up since Labor Day, suggesting some relief in the labor shortage front. In the meantime, we will continue to utilize third-party partners and contractors. International logistical issues have eased, significantly improving international supply chains. Where possible, we have advance-purchased critical parts to partially mitigate ongoing supply chain instability domestically. Our strategic capital investment in two state-of-the-art VAR remelt furnaces at North Jackson is progressing on time and within budget. With the new amendment to our credit facility, we have additional flexibility and liquidity to support our planned ramp up in production in this inflationary environment. We are fully focused on getting back on track with our growth plan this quarter. The fourth quarter is always super sensitive to seasonal factors and customers' proactive measures to manage their year-end inventories. Nonetheless, we plan to increase sales sequentially and expand margins. In conclusion, I want to again underscore our confidence in our ability to move forward with our growth plan and all of that rests on the ongoing determination and resiliency of our employees, support of our customers, financial institutions, stockholders, and board, and I'm personally very grateful to all of them. That concludes our formal remarks. Howard, if you're ready, we'll take some questions, please. Yes, sir. Ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. Again, if you have a question or comment at this time, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Philip Gibbs from KeyBanc. Your line is open. Hey, thanks. Good morning. Hey, Phil. How you doing? Good. Question first on just this amendment. I heard you say you had $22 million of liquidity. Does that include the additional $10 million that you have freed up, or does that not include that? The amendment is effective September 30, so that does include the additional liquidity provided. Okay. On the interest expense you mentioned, you know, obviously market rates have gone higher, and that line item, I think, was a little over $1 million. Is that what we should anticipate moving forward? Yes. Denny, there was a lot of noise as you mentioned with the Bridgeville piece still moving into the third quarter and misalignment on raw materials. You had a good guy in there too, but certainly not where you wanted to be in terms of, excuse me, gross margins. How much is this from a GAAP gross margin perspective relative to that 6% and change in the third quarter? Should we expect in the fourth quarter in terms of pickup? We'd be shooting for something in the low single, low double digits. Okay. Just what are the drivers sequentially? Are you completely out of the spill impacts? Is the misalignment easing some? Let's talk about this. The spill was a big impact on the company in the second quarter. It's a big impact in the third quarter, and will have some impact in the fourth quarter, but it won't be as large, though. As we start to ramp up operations and things stabilize, we basically have a big slug of material moving through operations that were candidly unstable because we either didn't have parts to run them or we didn't have the people to man them in all cases. As that is mitigated, and we're already seeing some of that mitigate as we sit here today, we would expect that bubble to go down and things to get back to some semblance of normal. I would expect there'll be some minor changes or minor impacts in the fourth quarter from the spill. As far as bottom line, somewhere around a half million to $750,000 perhaps, because we'll have pricing misalignments, and we'll have some production issues as well. On the misalignment from a commodity price standpoint, commodities peaked in June, came down sharply in the third quarter, stabilized a little bit, and right now, as we look at where surcharges are, we know what our surcharges are in October and November, and they're relatively flat to where we were in September. Looking at October, it's not over yet, but fundamentally, commodity prices dipped a little bit more in October, so you'll see some small decreases in surcharges in the month of December. All right. Material costs should basically go sideways. I think you will see some negative misalignment in the fourth quarter, but it'll be nowhere near as big as it was in the third quarter. Thank you. You're welcome. Thank you. Our next question or comment comes from the line of Robert Sales from LMK Capital Management. Mr. Sales, your line is open. Hi, can you hear me? Yeah, good morning, Rob. Hello. Good morning. Good morning. I wanna understand a couple things here. With the commodity prices down and now leveling off, let's ask the first question. Of your cost of goods, I guess I've never really asked this or don't have it written down. Raw materials as a percentage of your cost of goods, runs about what? If your cost of goods includes fixed costs and inventory and COGS, you're talking about something in the 55% range overall. 55%. Okay. Got it. With Keep in mind, now the range in that number can go as high as 75, and it can be below 50, depending upon what product you're talking about. Yeah, understood. That's a good average to use. Okay. Then if commodity prices were down, sort of on average, let's just pencil in a number of 20%, and that's, let's assume flat going forward. Just help us understand what that is. I would expect that your working capital would start to recede as it benefits from bringing in, you know, those lower costs, starting in, you know, whenever it was in Q3. Do you have any guidance for or mechanics for us to appreciate what will happen to that level of working capital as you roll forward with lower commodity prices? Well, let's talk through what's happened in the last two or three quarters. I mean, going up through June, we had significant increases in commodity prices. We also had some availability issues due to supply chain issues. If you remember on prior calls, I talked about the fact that raw material inventories, you know, were up largely because of price increases. We also increased the volume of raw materials in some cases to make sure we had adequate supplies of material that we're concerned about getting due to the supply chain. At the end of the second quarter, we had pretty rich raw materials, and as you see, then we had the spill, so we had a backup there. Raw material inventories are starting to come down physically and in dollar terms, and I would expect that to continue to get back to a more normal level, which is probably about 25% lower than we currently have. Right? 'Cause we churn through the raw materials fairly quickly. Work in process, the same issue. You're gonna see lower coming in prices to raw materials, which will over months as we produce, we transition to work in process and lower the average cost there. That'll be all set by the fact we're gonna need to increase inventories as we ramp up and start to address the production needs for our record backlog. When you put all that together, you got a lot of moving parts, and I would expect modest increases in working capital. Excuse me, in inventory as we go down the road. I would expect. That'll be partially funded by trade payables. From a receivable standpoint, receivables came down in the third quarter because of the lower sales. We expect them to start going back up. That's a use of cash on the surface, but it also, since we're an asset-based borrower, that also increased our borrowing flexibility. Got you. If you're getting $2-3 million a quarter- Hopefully I cleared things up and didn't make it more confusing. No, no, I understand. I'm estimating you get $2-$3 million a quarter just with your inventory turns and raw material costs with lower raw material costs. What you're saying is that's offset because you expect revenue to be up from the $46 million in Q3. I get all that. If I'm understanding it correctly, do you agree with that? Yes. Yes. Okay. Got it. When you talked about the backlog for your premium products, I think you said your premium products are now 30%, 33% of backlog versus 26% last quarter and 17% of revenue. Is all this backlog predicated on your current vacuum arc remelt capacity today? Or is some of that predicated on the new remelt furnaces going in? I would expect you have to re-qualify those, the new capital equipment before you're able to take orders against it. No, we have the remelt capacity when fully manned to be able to handle the backlog we have today. We need the additional remelt furnaces because we anticipate further growth in premium melted products. We've said publicly that our long-term goal is to get above $100 million of incremental sales into our company for vacuum melted or premium melted products. Right now we're running in the $40 million-$50 million range. We're working very diligently with a range of OEMs for additional approvals for basic products. As far as these additional two furnaces, right now we expect them in the first quarter. Frankly, they could come in before the end of the year. The building is basically ready to go. The holes are dug. We're ready to pop them in. We would plan to begin cold commissioning of them in early second quarter and producing trial heats mid to late second quarter. All that's targeted towards bringing them into operation by the fourth quarter of 2024. At that point in time, timing-wise, we would expect to have continued growth in real volume in backlog for our premium melted products, plus additional approvals that we will be bidding on. Understood. The other thing I wanted to ask, which is a broader question, you know, with the F-35 issue with some Chinese exotic material in the F-35, and then there's also, you know, sort of an amazingly aggressive moves on the part of the Biden administration with semiconductor capital equipment. Do you sense, Denny, that you're getting any sort of tailwind with U.S. manufacturers pulling away from Chinese suppliers, or is that not really part of what you're seeing in your order flows today? Well, internal to our company, we did do a lot of work earlier this year to de-risk our exposure to China and to the whole Ukraine-Russia area in terms of what we were purchasing. In terms of our business, we hear a lot of anecdotal stories about onshoring coming back to the States and de-emphasizing China as a market. Candidly, I don't think we're seeing anything tangibly. Yeah. I just wondered on the automobile side whether or not that- Say that again, Rob, I'm sorry. Yep. Okay. I was just thinking on the automobile part of it, a lot of that stainless that you guys get for tooling used to come from China, and I didn't know whether or not, you know, the industry had sort of wanted to make a clean break from China on some of that or not. You know, our selling into that industry is strictly tool steel plate. There's only a couple of producers of tool steel plate domestically, and quite frankly, we don't see any Chinese competition in that product line. Gotcha. I'm gonna continue on because generally there's only three or four questioners. Did I hear that you said that the surcharge, the misalignment of surcharge and commodity costs in the quarter sequentially was a negative 320 basis points on gross margins? Yes. Yes. Steve said that. I didn't say it, but yes, that's correct. Yeah. When you- He's looking at it. $1.5 million impact pre-tax. Yeah. When you go forward, you don't, and the commodity prices level off, you still have a sequential misalignment relative to Q2, but the misalignment starts to become less as lower cost materials flow through your supply, your accounting. Is that correct? Yes. In effect, the cost of melting the product catches up to where the surcharge is. That'll be happening as we move through the fourth quarter. The one thing to be aware of is it looks like unless something changes dramatically, December surcharges will be down modestly. That's why there'll still be some misalignment in the fourth quarter, but it won't be as large as what you saw in the third quarter. Over time, by the time we get into the first half, as things stabilize, things go back to normal. The other thing to keep in mind there is we have announced six base price increases over the last year. As we go through each quarter, we get a benefit from higher prices as well. Got it. Just focusing on the misalignment. If we were to go a year forward and you flush out all of your raw materials inventory because you turn it over about four times a year, it looks like a year from now, the alignment would be back to zero. Assuming raw material costs were fixed and assuming there was no changes in surcharges, if I'm doing the math right, is that the right thinking? That's the right thinking, but it wouldn't take a year. Got it. Okay, thanks for taking my questions and, you know, look forward to seeing how the progression as we go from here. This is a tough couple quarters you guys had. Okay. Thanks, Rob. Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to Mr. Oates for any closing comments. Okay, Howard, thank you. Once again, thanks, thank you everyone for joining us this morning. We're committed to getting back on track with our growth plan and seizing market opportunities, especially in aerospace. I'll be looking forward to updating you on our progress on our next call, which will be in January. In the meantime, be well, stay safe, and enjoy the upcoming holidays. Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.