Good morning, and Welcome to the Olympic Steel 2022 Third Quarter Financial Results Conference 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, please, this conference is being recorded. I would now like to hand the conference over to Rich Manson, Chief Financial Officer at Olympic Steel. Please go ahead, sir. Thank you, operator. Welcome to Olympic Steel's Earnings Call for the Third Quarter of 2022. Our call this morning will be hosted by our Chief Executive Officer, Richard Marabito, and we will also be joined by our President and Chief Operating Officer, Andrew Greiff. Before we begin, I have a few reminders. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and may not reflect actual results. The company does not undertake to update such statements, changes in assumptions, or changes in other factors affecting such forward-looking statements. Important assumptions, risks, uncertainties, and other factors that could cause actual results to differ materially are set forth in the company's reports on Forms 10-K and 10-Q and the press releases filed with the Securities and Exchange Commission. During today's discussion, we may refer to adjusted net income per diluted share, EBITDA, and adjusted EBITDA, which are all non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided in the press release that was issued yesterday and can be found on our website. Today's live broadcast will be archived and available for replay on Olympic Steel's website. At this time, I'll turn the call over to Rick. Thank you, Rich, and good morning, everyone. Thank you for joining us today to discuss Olympic Steel's Results for the Third Quarter of 2022. I'll begin with some overall comments on our business and our third quarter performance, and then I'll turn the call over to Andrew, who will review highlights for each of our segments and provide some comments on our market outlook. Following that, Rich will discuss our financial results in more detail, and then, as always, we'll take your questions. Market dynamics in the steel industry have certainly shifted dramatically since this time last year. We have seen metals pricing significantly decline across the board. Hot-rolled pricing has fallen by more than 50% since its peak in April. While overall market demand has been consistent, it remains impacted by macroeconomic concerns such as inflation, rising interest rates, the overall speculation of a recession, and persistent non-steel-related supply chain and labor issues. Despite this remarkable shift, Olympic Steel continues to perform well. We delivered sales of $634 million and adjusted EBITDA of $25.3 million for the third quarter of 2022, while simultaneously strengthening our balance sheet. Strong cash flows have resulted in an $84 million or 26% reduction in our outstanding debt so far this year. Our performance in the face of tough market conditions is further evidence that our diversification strategy has better positioned Olympic to succeed in all market cycles. We are a stronger and less cyclical organization today as compared to past declining price markets. Our growth in higher return, value add products and services, coupled with our sustained operational disciplines around inventory, costs, and investment criteria, has allowed our business to thrive despite historic price declines and market challenges. Our team has worked diligently to execute on the strategy and strengthen our business. We have completed five successful acquisitions and made targeted organic investments in all three of our business segments to increase our capacity and enhance our efficiency. At the same time, we evaluated our portfolio and identified areas that no longer aligned with our vision for the company, including the decision to divest of our Detroit division in September 2021. We also took a hard look at our operations and implemented measures to improve inventory turnover and permanently right-size our cost profile. We would not have made this progress without the right team and leadership in place. Our work is not done. We anticipate continued strong cash flows and further debt reduction in the fourth quarter. We have significant liquidity and continue to actively pursue acquisitions and invest in new equipment and efficiencies through automation, which Andrew will highlight in a moment. While we expect the macroeconomic challenges and declining metal pricing will remain a short-term headwind, we are well-positioned as a company, and we are confident in the future of Olympic Steel to deliver value to our shareholders. Finally, our board of directors approved a regular quarterly dividend of $0.09 per share that's payable on December 15th, 2022 to shareholders of record on December 1st, 2022. Olympic has now paid a regular quarterly dividend for 17 consecutive years, and as a reminder, we increased our dividend from $0.02 per share to $0.09 per share this past March. With that, I'll turn the call over to Andrew to provide an overview of our segments and what we're seeing in the market as we approach year-end. Thank you, Rick, and good morning, everybody. Each of our business segments reported solid third quarter results. This was due in large part to the hard work of our people and the continued follow-through on our strategy and operational initiatives. The Specialty Metals segment, led by Andy Markowitz, remained very profitable with EBITDA of $16.1 million for the quarter. The Specialty Metals team achieved these results while navigating challenges from stainless flat roll imports and falling surcharges, which led to lower spot sales and compressed margins. The team's outstanding efforts to manage inventory levels while maintaining solid profitability was the primary driver of this segment's strong performance. Our Pipe and Tube segment, led by Bill Zielinski, continued to deliver exceptional results. Third quarter EBITDA was $9.7 million for the segment, and year-to-date EBITDA was $34.1 million, equaling the full-year record set in 2021. The Pipe & Tube team continues to focus on controlling inventories and expanding its business to offer additional value-added products and services to meet customer demand. The performance of our carbon segment, led by David J. Gea, may be the most gratifying of all, considering the dramatic fluctuation of the Hot-Rolled Coil CRU Index, which, as discussed earlier, climbed from $935 per ton in March 2022 to a peak of $1,492 six weeks later, and then dropped to $791 per ton by the end of September. The carbon team was able to navigate the extremely challenging market conditions to contribute quarterly EBITDA of $4.3 million. As Rick mentioned, we are continuing to invest in our business, and we are excited about the opportunities this is creating for us. Most notably, we made significant progress on expanding our capabilities in the South. We are pleased to share that our latest expansion in this region is officially up and running with our second automotive stamping press, including an automated packaging line, now fully operational in Winder, Georgia. In Buford, Georgia, 2 new Mitsubishi 10K lasers plus 2 new robotic welders have been installed. This will begin our entry into welded parts for several key customers, and the investment in automation will help alleviate the need for additional labor. We are also seeing strong interest from other industrial OEMs to have fabrication work outsourced to our Buford facility. As we mentioned last quarter, based on the success of this model at Buford and Winder, we are taking a similar approach to the Chicago area, where our Schaumburg distribution facility had no room for expansion. We are making good progress on our build-out of a new white metals facility in Bartlett, Illinois, to house Schaumburg's current fabrication work to serve the growing needs of our customers. We expect this new facility to be fully operational in early 2023. Looking at the balance of the year, we expect current market dynamics to continue. Contract customers will likely continue to be challenged by labor and supply chain issues, and have prevented most of our OEMs from increasing their production to reduce backlogs. In addition, we expect margins will remain under pressure due to declines in carbon, stainless, and aluminum pricing. While demand from our large industrial customers has remained steady, we expect some further impact on volumes as spot sales remain challenging in this environment. As always, we'll continue to focus on what we can control, mainly disciplined management of inventory and expenses. We are confident that these changes we have made to the business in the past few years, along with our continued initiatives, put the company in a strong position to weather any potential market downturn. Now I'll turn the call over to Rich. Thank you, Andrew, and good morning, everyone. Before I discuss our third quarter results, please keep in mind that we completed the disposition of our Detroit operations during the third quarter of 2021, and we acquired Shaw Stainless & Alloy in the fourth quarter of 2021. Those transactions impact our year-over-year comparisons. As Rick and Andrew have noted, our third quarter performance reflects the actions we have taken over the past three-plus years to better position the company for success in all market cycles. Net income totaled $12 million, compared with $44.5 million in the third quarter of 2021. Adjusted EBITDA was $25.3 million, compared with $70.5 million a year ago. Our third quarter 2022 results include $1.5 million of LIFO pre-tax expense. Our total debt decreased in 2022 by $84 million to $244 million at September 30th, including a $44 million dollar reduction in debt during the third quarter. We expect additional debt reduction in the fourth quarter. At quarter end, credit availability was approximately $227 million. Additionally, at quarter end, we had an additional $153 million of collateral above our $475 million asset-based revolver. As well as an untapped $75 million dollar credit line on our unencumbered real estate portfolio. We have significant capital to deploy for both additional acquisitions and organic growth opportunities. Consolidated operating expenses totaled $87.9 million, an increase of $2.4 million or 2.9% compared with $85.4 million in the third quarter of last year. Consolidated operating expenses for the third quarter this year included $2.1 million of operating expenses and $6.3 million of lower performance-based incentive expenses when compared to the third quarter of last year. Also, third quarter 2021 operating expenses were shown net of a $3.5 million gain on the sale of our Detroit operation. Capital expenditures totaled $14 million compared with depreciation of $13.6 million. We anticipate cash utilization for approximately $20 million for capital expenditures for the full year of 2022. As we have shared on previous calls, we have approved over $36 million of capital expenditures thus far in 2022, but long lead times are slowing the utilization of cash. Our effective tax rate for the third quarter was 25%, compared to 26% in the third quarter of 2021. We expect our effective tax rate to approximate 27%-28% for the full year. Also, during the quarter, we paid a dividend of $0.09 per share, and we've now paid dividends for 70 consecutive quarters. In closing, I want to reiterate the significance of the results we achieved in the face of some very challenging market conditions. We performed well despite declining metals prices, macroeconomic headwinds, and supply chain issues. We believe we have built a stronger, more resilient Olympic Steel that positions us for success in all market cycles. Now, operator, let's open the call for questions. 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 speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment please, while we pull for questions. The first question comes from Samuel McKinney with KeyBank. Please go ahead. Morning, guys. Morning, Sam. Morning, Sam. Hi. When we look in the third quarter, it was continued inflation in operating expenses versus sales. Into the fourth quarter, what's your outlook for this? If you could, tell us what the profit sharing was year-to-date versus 2021, so we can distill the magnitude of increases in the other line items? Yeah, Sam. When we look at operating expenses, what we had been seeing for the first and second quarter was between 5% and 5.4% inflation. We saw about 5.2% inflation in the third quarter when you adjust out for, you know, kind of to be on a same store basis. You know, I think the one big difference we saw in the third quarter and we had highlighted in the second quarter was there was about a $3 million increase in transportation expense on the second quarter following the Ukraine invasion. That was about a a million dollar effect in the third quarter. In general, I don't see inflation going up on all items other than transportation in the fourth quarter. As we've all read, there's, you know, a national diesel shortage, and that remains the wild card kind of going into the fourth quarter. Okay. Thanks. Then the third quarter was another really strong quarter of reducing debt for you guys, over $20 million. Is the goal for the fourth quarter to be another period of that magnitude? Yes. Sam, it's Rich again. Yeah, I do anticipate that the debt reduction will be at least as good as it was in the third quarter. I think there's a decent chance that we end up sub $200 million by year-end. Okay. Yeah, that's great. Andrew touched on it earlier, the fourth quarter outlook for demand, but there was a sequential step down, obviously, in volumes in both Carbon Flat and Specialty in the third quarter. From a demand perspective, if you could just get into a little more detail what you're seeing from your major industrial OEMs as we're through October now. Yeah, Sam, I'd be happy to do that. I think from a macro picture, we see fourth quarter down probably 6%-9% in overall volume. The industrial OEMs have remained pretty steady into the fourth quarter and are cautiously optimistic as we take a look going into the first quarter. In the carbon side of it, certainly where you have the large industrials, again, pretty steady, not able really to progress because of some of the supply chain issues, predominantly labor. It's not a metal issue now. You may have some components coming in from offshore that are still an issue, but doing very well. Challenges there are gonna be more on the transactional side of the business as we've seen index pricing fall off since the end of the third quarter. On the Specialty Metals side, again, our, you know, couple of the key areas, we do some automotive still that are done outside of Detroit, obviously, as we diversified and got out of Detroit. We're still doing some automotive in some of our other areas. Truck trailer, we think is gonna continue to be strong. In the food equipment industry, we're starting to see some pickup in that side of it. We're pretty optimistic that there'll be a little bit of an increase heading into next year. Our Pipe & Tube division, where pricing lags a little bit, but the volume has been very steady, and we think that's gonna continue heading into first quarter, probably first half of next year. Okay. Thanks, Andrew. Lastly for me, as you continue this diversification strategy that you cited in the release, could you talk us through your appetite for any more incremental acquisitions, any more areas or geographies where you might like to grow? Yeah, sure. Sam, this is Rick. I think you hit it. It's really looking at acquisitions to continue our growth both geographically. Like Action Stainless, you saw us migrate into some geographies like the South and Southwest, where we weren't. That's certainly very interesting to us. In terms of some of the products, we've talked on prior calls about aluminum being an area that we'd like to grow in the white metals segment. That would certainly be of interest. Then really across all three segments, it's continuing to look for great fits, where there's a high value add, high return component to our business. That's certainly high on the list. I guess I'd end with we're still actively pursuing several opportunities. We certainly see acquisitions being an avenue for continued growth in the near term. Okay. Thank you. That's it for me. Thank you. Next question comes from David Storms with Stonegate. Please go ahead. Morning, and thank you for taking my question. Just touching on the CapEx and the slowdown that you're seeing in 2022, how much of that is expected to bleed into 2023 for next year? Yeah. Dave, I think what we alluded to is $36 million of total POs, you know, issued so far this year, and we think there's about, you know, $20 million of actual cash utilization. I would expect, you know, $10 million-$15 million of that bleeding over into next year. I think we have a robust CapEx budget for next year. We're kind of finalizing that right now. Similarly, what we're seeing is that, you know, lead times are going to bleed out past, you know, 2023 for the things we order in 2023. I think that, you know, $20 million is still a good cash utilization number for this year. You know, by the time we do this call in February, we'll have some better guidance for the cash utilization in 2023. Perfect. Thank you. Just looking at, you know, your strong cash position, your strong debt position, obviously, you're able to bring on the Georgia plants while still growing your cash. Should we expect to see the same kind of growth while you make that expansion into the Chicago area? Or now that you kind of have a roadmap on how to bring these new plants up to speed, is that gonna start eating into, you know, your cash position? Yeah. Dave, you know, we are a net borrower, and everything is reflected on our asset-based loan. When we talk about the Chicago expansion, you know, that's just taking the existing facility we have in Schaumburg and basically splitting it between distribution and fabrication. The new facility in Bartlett, which I believe Andrew is 80,000 sq ft. That's right. You know, that is a rented facility, and essentially we're moving existing equipment from the Schaumburg facility into that. Although we will be adding some lasers and some automation equipment to it. I do not expect it to be a significant draw on debt to get any of that up and running. That's perfect. Thank you very much. Okay. Thank you. Next question comes from Alan Weber with Robotti Advisors. Please go ahead. Good morning. Good morning, Alan. Hi. I may have missed what was cash flow in the third quarter? Yeah. Maybe I missed the cash flow statement. Yeah. No, the cash flow statement, I don't think it's in the earnings release, but it'll be in the full- Sorry 10-Q, which will be issued later today. What you'll have there, Alan, is that we paid down debt $44 million during the third quarter. Total debt reduction in the first half or for the full year has been $88 million. Based on the call you heard earlier from Sam, we expect debt to be some $200 million, you know, by year-end. Actually, the cash flow statement is in the earnings release. Okay. When you look out over the next few years, can you just talk about some of the macro trends, you know, that you're seeing, whether anything's changed and you know, infrastructure, et cetera? Um- Your pricing. Well, Alan, this is Andrew. Here's what I would tell you. I think what we've learned in the last couple of years is that the large industrial OEMs. While some of the supply chain issues are gonna resolve themselves, you know, over the course of the next 6-12 months, labor issues are still going to be a challenge. What we hear most from our customer is how can we help them get to market faster? It's gonna be a big part of as we look to increase our fabrication to be able to help them be able to get to market faster. The discussions that we've had, certainly over the last 12 months-18 months have been different than probably what we saw before, because there's a real partnership taking place today, and real back-and-forth conversation about areas that we should be investing in to help these large customers, do a better job in mitigating their costs and again, how do they get to market faster? Yeah. Alan, it's Rick. I think some of the other dynamics as we look forward that quite frankly we get excited about for Olympic, you've mentioned, infrastructure, so certainly, you know, we've talked a lot about that. While we are not a large direct construction, you know, long product company, we do sell a lot of metal and steel that goes into construction equipment and all the things you'd see at a construction site. So that's one thing that's, I think very positive. The other thing that I get excited about is, I do believe that we will see a resurgence of manufacturing in the United States based upon all these supply chain shortages that we saw during COVID. I think specifically, things that were globally sourced and not sourced here, you can go through the long laundry list of OEMs who had trouble sourcing individual parts, so. We've already seen a lot of that with chips and other items. I think as we move forward, we'll see more of that. I think also probably a little bit more inventory held in the supply chain. You know, the whole just-in-time concept will continue. Actually, a friend in the business told me a great line. He said it's gonna be instead of just in time, it's gonna be just in case. I think that says it well, a little bit extra in the supply chain to make sure that we don't experience what we've gone through. You know, those are a couple of other dynamics in the industry over the coming quarters that at least we get excited about on the demand side. You know, hopefully we see U.S. metal consumption increase based upon some of those factors. Okay. Any thoughts about long-term pricing? Well, that's a great question. You know, I think there is certainly challenges today as new capacity is coming online. The expectation is that demand will, you know, in the long term, certainly catch up to where the capacity is in the U.S. You know, on a short-term basis, you know, you've got a strong dollar, so you'll probably see imports a little bit stronger. You know, if you listen to the prognosticators, the, you know, the dollar will weaken, you know, over time. I think what you'll see is demand start to catch up. Rick talked about the infrastructure bill, certainly gonna bode well for the industrial OEMs. I think where you're seeing some more reshoring will lend itself very well to manufacturing. You know, these mills are you know, looking far out, otherwise they're not gonna be adding capacity or building new facilities. I also think, Alan, just from the price standpoint, the other thing that I think as you look at history and then looking forward, certainly with the inflation we've seen, there's a couple of areas that probably you will not see costs go back down to where they were. Certainly labor, you know, labor never goes in reverse. I think energy and transportation costs going forward are gonna remain elevated. So I think, you know, some of the input costs in terms of metal pricing are gonna be permanently higher, and that may, as you really look long term, may point to higher metal pricing than what traditionally we've seen prior to the last cycle of the last couple of years. Okay. Great. Thank you very much. Thank you. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Next question comes from Chris Sakai with Singular Research. Please go ahead. Hi. Good morning. Good morning, Chris. Good morning. Just wanted to talk about inventory levels. How do you guys feel about them currently in the pricing environment today? Yeah, great question, Chris. We've worked hard to maintain appropriate inventory levels. I think as we come through the fourth quarter, we're gonna be right where we wanna be. We've spent a lot of time on inventory turns, doing a much better job in all of our reporting segments, and I'm really pleased with the effort that our individual divisions have done. I think we'll be appropriate by the end of the fourth quarter. Okay, thanks for that. Next quarter and beyond, what's in your plans for debt reduction? Is that still gonna be consistent? Yeah, Chris, I think as we've answered, you know, on a couple of the calls that we do expect to be sub $200 by the end of the year. You know, I think that what you typically see in most cycles is that first quarter is generally a rebuild of the working capital kind of coming off year-end lows. You know, I don't know that you'd see a lot of debt reduction in the first quarter beyond that, but we certainly will see it here in the fourth quarter. Yeah. I think if you just look broad-based, probably have a little bit more pricing impact that'll continue into the first quarter. As you know, there's a lag on inventory and receivables. I think Rich is right. I think the bulk of the debt pay down and cash flow we'll continue to see in the fourth quarter, and then it will probably level off. Okay, thanks for that. Lastly, you know, what are the conditions? What would it be for a dividend increase? Great question. I obviously commented that, you know, we increased our dividend from $0.02 to $0.09 at the beginning of this year, so our March dividend. That's certainly a topic that our board looks at. We wanna ensure that we've got a competitive dividend, you know, in terms of the yield. I think from an availability standpoint on cash, we're in a very strong position with a strong balance sheet and plenty of liquidity. I certainly think that'll be something that the board looks at for 2023 to make sure that our dividend is competitive from a yield standpoint. Okay. Thanks for the answers. Thank you, Chris. Thanks, Chris. Thanks, Chris. There are no further questions at this time. I would like to turn the floor over back to Richard Marabito for closing comments. Thank you, operator. Thank all of you for joining us on our call today. We certainly appreciate your continued interest in Olympic Steel, and we look forward to speaking with you again next quarter. Thank you and have a good day. This concludes today's conference call. You may disconnect your line and have a great day.