Good morning, and welcome to Olympic Steel 2023 first quarter financial results conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I would 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 first quarter of 2023. Our call this morning will be hosted by our Chief Executive Officer, Rick 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 last night 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. Good morning, everyone. Thank you for joining us on today's conference call to discuss Olympic Steel's 2023 first quarter results. I'll begin with an overview of another strong quarter for Olympic Steel, driven by our ongoing strategy to diversify and strengthen our company. Andrew will review highlights from each segment and provide some comments on market conditions. Following that, Rich will discuss our financial results in more detail, then, as always, we will open up the call for your questions. Our year is off to a strong start. For the first quarter, Olympic Steel reported sales of $573 million and Adjusted EBITDA of $28.6 million, with balanced earnings from all three of our segments. Overall customer demand remained steady, with metal distribution shipments increasing 3% from a year ago and significantly increasing 15% from the seasonally slower fourth quarter. As we mentioned on our last call, after six months of declining steel prices, we began to see price increases in December of last year, and these supply-driven increases accelerated as we entered 2023. At the end of the first quarter, hot rolled index pricing was up 74% from the beginning of the year. Our acquisition of Metal-Fab in January was a highlight for the quarter. As the second largest acquisition in our history and our sixth acquisition in the last five years, Metal-Fab represents the latest success in our strategy to diversify and strengthen Olympic Steel. As you'll recall, Metal-Fab broadens our product offerings, capabilities, and geographic reach by producing venting and filtration products for residential, commercial, and industrial applications. Products are manufactured primarily of coated carbon and stainless steel and aluminum in our two Wichita, Kansas facilities. Included in our carbon segment, we're thrilled with the fast start and the performance of Metal-Fab. As Rich will highlight later, the impacts of one-time acquisition expenses and purchase accounting adjustments are now behind us in the first quarter, and we will see the benefit of Metal-Fab's earnings in the second quarter of 2023, followed by meaningful synergies beginning in the second half of the year. While successfully integrating Metal-Fab is a priority for our team, Olympic Steel remains extremely well-positioned to identify and pursue additional acquisition opportunities that advance our strategy. Our balance sheet is incredibly strong, and with the increase in our v-revolving credit line executed in conjunction with the Metal-Fab deal, we now have record levels of capital and borrowing availability to invest in organic growth initiatives, automation, and further acquisitions that align with our strategic priorities. We're excited about the future of Olympic Steel and the prospects to build our business model for sustainable long-term success. We also recently issued our second corporate responsibility report, which can be accessed on our website. The report highlights our progress in ESG, DEI, safety, and our other core value initiatives at Olympic Steel. As we look ahead, we understand that the near-term macroeconomic picture is unsettled. However, demand from our industrial OEMs remains steady, and we expect the second quarter to look a lot like our first quarter. We have demonstrated that our team's actions to diversify and grow Olympic Steel have made us a stronger, more resilient, and consistent performer while navigating the impacts of market cyclicality. Now with that, I will turn the call over to Andrew Greiff. Thank you, Rick. Good morning, everyone. As Rick noted, the first quarter was a strong start to the year, with solid and steady performance from each of our segments. Now for a look at our performance by segment, starting with Carbon. The favorable combination of increased shipment volume, an improving pricing environment, and the addition of Metal-Fab delivered a strong quarter. Although results were adversely affected by one-time charges associated with the acquisition, Carbon contributed Adjusted EBITDA of $11.6 million for the quarter. The team's hard work and discipline around inventory management enabled the segment to positively impact our results as our shipments rose 6% from a year ago, which does not include Metal-Fab as we do not report tons sold for this business. Congratulations to David Gea and the entire Carbon segment on their outstanding work and performance this quarter. Pipe and Tube, led by Bill Zielinski, had its second most profitable quarter ever, contributing EBITDA of $11.3 million. The team's focus on margin improvement and fabricated product growth is driving positive results. In particular, the investments to improve the segment's fabrication capabilities are leading to enhanced laser speeds, reduced lead times, and improved service to customers. We are also targeting a May groundbreaking for our 30,000 sq ft Des Moines, Iowa expansion, with expectations to be operational by the end of the year. Specialty Metals, led by Andy Markowitz, faced industry-wide stainless steel headwinds, leading to softer volumes and lower margins. The good news is we were still able to post another very profitable quarter, earning EBITDA of $10.2 million. We continue to organically grow in aluminum as our share of the market rose to a two-year high following the divestiture of our Detroit operation in September of 2021. Our new white metals fabrication facility in Bartlett, Illinois, is near completion, and we expect it will be fully operational in the second quarter. Overall, we expect second quarter demand to remain steady, similar to the first quarter. Our industrial OEMs continue to show a solid backlog and are performing to forecast. We are seeing a pickup in our food equipment and appliance segments, truck trailer customers, and transplant automotive business in the Southeast. Thank you to our entire team for another outstanding quarter. Now I'll turn the call over to Rich. Thank you, Andrew, and good morning, everyone. It was an exciting quarter for Olympic Steel, highlighted by strong performances in all of our segments, our successful acquisition of Metal-Fab, and the increase in our revolving credit line from $475 million - $625 million, resulting in record availability for continued investments in acquisitions and organic growth opportunities. Please keep in mind that the inclusion of Metal-Fab in our first quarter 2023 results will make year-over-year comparisons more difficult. Metal-Fab, which is included in our Carbon segment, does not report tons sold and typically has higher returns than our distribution business. Additionally, there are several one-time acquisition-related adjustments that we highlighted in our Adjusted EBITDA reconciliation. For the quarter, net income totaled $9.8 million, compared with $37.3 million in the first quarter of 2022. No LIFO adjustment was recorded for the first quarters of 2023 or 2022. Adjusted EBITDA was $28.6 million for the first quarter. Adjusted EBITDA excludes a one-time $2.1 million GAAP fair market value adjustment to Metal-Fab's inventory and $2.6 million of acquisition-related expenses. We expect that our reported financial results will begin reflecting the full strength of Metal-Fab's earning power in the second quarter of 2023, as the acquisition-related charges will be behind us, and we expect to begin realizing metal supply synergies in the second half of 2023. Our total debt at the end of the first quarter was $258 million, an increase of $93 million since year-end 2022, which included the $131 million acquisition of Metal-Fab. During the quarter, we generated $52 million of cash from operations, resulting in a $38 million reduction in debt during the quarter. We expect additional debt reduction during 2023, primarily occurring in the second half of the year. At quarter end, our credit availability was a record $355 million, providing us with significant capital to continue our strategic investments in acquisitions, new capacity, and automation to drive increased efficiency. Consolidated operating expenses, including Metal-Fab, totaled $102.7 million in the first quarter, an increase of $14.6 million or 16.6% from the prior year quarter. The higher expense level reflects the addition of Metal-Fab's operating expenses, the one-time acquisition related charges, and the absence of a $2.1 million gain on the sale of our Milan, Iowa warehouse that occurred in the first quarter of 2022. Capital expenditures for the first quarter of 2023 totaled $7.4 million compared with depreciation of $5.1 million. We expect 2023 capital expenditures to total $30 million. Our effective tax rate for the first quarter of 2023 was 26.8%, compared to 27.0% in the first quarter of 2022. During the quarter, we paid the higher cash dividend of $0.125 per share, a 39% increase from our previous quarterly dividend of $0.09 per share. Our board of directors approved a $0.125 per share dividend payable on June 15th to holders as of June 1st. Subject to board approval, we expect to maintain the quarterly dividend of $0.125 on a regular basis. We have now paid dividends for 72 consecutive quarters. Looking forward, we are excited that our reported financial results in the second quarter and beyond will begin to reflect the full strength of Metal-Fab's earning power. The impact from Metal-Fab, along with the continued success of our strategic investments in diversification and organic growth, gives us great confidence in the future of Olympic Steel. Operator, let's open the call for questions. Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Thank you. Our first question is from the line of Samuel McKinney with KeyBanc Capital Markets. Please proceed with your questions. Hi. Good morning. Good morning. Good morning, Sam. Although HRC pricing has slowed in recent weeks, it had a significant run in the recent months before that. I know you have a heavy contract book. It tends to lag the spot price rise. What are your expectations for pricing for carbon in the second quarter after it was basically flat sequentially in the first quarter? Yeah, it's a great question, Sam. We expect as you've seen certainly in the past few weeks, you've seen index pricing come off a little bit. You've seen futures come off certainly more than the index price. We think that we'll see a little softness as we come through the second quarter. As you said, there is a lag. We anticipate that margins will hold through the second quarter, and then we'll see where pricing goes from there. Okay. Thank you. Specialty metals volumes were up slightly and pricing was down slightly sequentially. You mentioned the stainless dynamic earlier in the call, but if you could walk us more through those specialty metals dynamics during the first quarter and just directionally what you're expecting from shipments and volumes in the second quarter? Yeah. Well, the expectation... A couple of things, Sam. First, you know, inventory levels at the service centers were relatively high coming into the first quarter. We've seen a reduction. As you take a look at the MSCI MAR report, you've seen inventory on hand come down from about four months down to about three months. We anticipate that that will drop over the course of the next month, probably another month. Lead times from the stainless mills are pretty steady right now, and imports are certainly going to play a bigger role as we come into the second half. Our major customers from the food equipment side of it have started to pick up. We think that volume will be a little bit better coming into the second quarter. Truck trailer, which is another big part of what we're doing, has improved. Our automotive business that we participate in has been very steady, and we've seen a little bit of uptick there as well. I would think that second quarter will look a little bit better than the first quarter and would anticipate certainly on the inventory levels that everybody will be much more in line as we come through the second quarter. Okay. Thank you. Then lastly for me, the release last night mentioned that you expect to see the full effect of Metal-Fab earnings in the second quarter and synergies in the second half. Is there any way to frame up the sort of impact you expect that to have to your overall numbers? Should we just expect it to track the historical earnings that you provided in March? Sam, it's Rich. Yeah. I think using the historical financials from the 10-K that was filed in March is a good starting point. I think the two biggest things that you won't see in the second quarter are the two one-time charges that we identified in the earnings release. You won't have that $2.1 million write-up of the inventory that resulted in higher cost of goods sold, and you won't have that $2.6 million of deal-related expenses. Just to be clear, the $2.1 million affected the carbon segment, the $2.6 million affected the ZEUS cost center. I think, you know, as we said in the comments, you know, second quarter is gonna look a lot like the first quarter. You're just not gonna have those one-time charges. I think, Sam, in the back half of the year, we commented 2 x, we're pretty excited about some of the synergies we bring on the carbon supply side. We think by, beginning of third quarter, we're gonna start to see those. That'll be a little power boost in the back half, in terms of Metal-Fab's performance. Okay. That's it for me. Thanks, guys. Good luck. Thanks, Sam. Thank you. Our next question is from the line of Dave Storms with Stonegate Capital. Please proceed with your questions. Morning. Good morning, Dave. First one, quick one. Just with the Iowa groundbreaking in May, because that's an expansion, there won't be any downtime associated with that, correct? That's correct. That is just purely expansion. 30,000 additional sq ft, and would expect to see that effect more in 2024. It should be operational by year-end, but it would probably have more of an effect in 2024 than 2023. Right. No, we don't anticipate any disruption in the back half while we construct and expand the building. That's perfect. Okay, thank you. just on kind of the per tonnage cost for warehousing and distribution, that number just kind of seems to keep on climbing. Is there any green shoots on a reprieve there, or is this the new normal that we live in? David, it's Rich. Really that is the effect of the businesses we've acquired in recent years don't report tons sold. They're more on the manufacturing side. What happens if you're using the same denominator of tons, you're gonna have a higher operating expense number that you're dividing those tons into, it looks like it's rising. As we pointed out in the comments, you know, we were up, you know, roughly, I can't remember the exact number. I think it was around $14 million of expenses first quarter of 2023 versus first quarter of 2022. That's accounted for in Metal-Fab, the $2.6 million of deal related expenses, and then the absence of that $2.1 million gain on the sale of the Milan, Iowa warehouse that occurred in 2022, which reduced operating expenses. Those are the three items that explain the entire increase in the operating expenses. We're comfortable where the operating expenses are. We're actually seeing inflation kind of come down quarter-over-quarter, as we've seen through the last nine months or so. I think that's the issue, is that you're comparing higher operating expenses that reflect manufacturing businesses that don't reflect tons sold. That's very helpful. Thank you. Then one more from me, if I could. You mentioned kind of in-industry-wide entry levels coming down. Just curious as to how you think about industry-wide capacity, going forward and how you see that changing, you know, through the rest of 2023 and maybe even into 2024. Well, you can take a look at it from two sides. From a mill capacity, we see more product coming online on the carbon side. second half of the year, some of the mills that have been a little behind in getting up and going seem to be in much better shape today. We will anticipate that there'll be more product available in the second half of the year. On the stainless and aluminum side, domestic mills performing really well. You'll see certainly some imports. The same thing on the aluminum mills. Aluminum mills are producing very well. We'll see a little bit more on the import side of it. From the service centers and from the customers, you're gonna see pretty much the way that it is now. With the customers on the supply chain issues that we've seen, it's probably more labor today than raw material, but labor is certainly an issue. The industrial OEMs are having challenges trying to eat into their backlogs. That's very helpful. Thank you. Thank you. As a reminder, to ask a question, you may press star one. The next question is from the line of Chris Sakai with Singular Research. Please proceed with your question. Hi. Good morning. Morning, Chris. Morning, Chris. Can you shed some light on the margin expansion in tube and pipe and what drove that? Yeah, Chris, great question. Our pipe and tube business, and we've been commenting on this for several quarters, but the investment in more fabrication type value add assets are really starting to yield the results that you're seeing in the gross margin. It's really the result of a very intentional strategy over the last several years to continue to expand the value add equipment. Also I might add our stainless portion of the pipe and tube business is growing, and it tends to have a little bit of a higher return. Those would be the two primary reasons. Okay, great. Can you comment on your appetite for more acquisitions after the Metal-Fab acquisition? Yeah. Yeah. Thanks, Chris. certainly, we continue to look at acquisitions as one of the pillars of our growth strategy. I think as Rich mentioned in the prepared remarks, and I did as well, the good news is even after the Metal-Fab acquisition, we're now at record availability, have an exceptionally strong balance sheet. We've got plenty of capacity to do that. We continue to look at strategic acquisitions. It's, it's just part of what we do strategically and every day in our operations right now. You should expect us to continue much on the path that we've been over the last five years going forward on acquisitions. Obviously, Metal-Fab was a big one. We're very focused on the integration aspects of Metal-Fab, which by the way, is going tremendously. It's really after three or four months, it's been a very, very smooth transition. Acquisitions are gonna continue to be a growth driver for us together with organic growth, as you've seen in some of the projects that Andrew highlighted earlier. Okay. Thanks for the answer. You're welcome. Thank you. At this time, we've reached the end of our question and answer session. I'll turn the floor back to Rick Marabito for closing remarks. Well, thank you very much, and thanks for joining us on our call this morning. We certainly appreciate your continued interest in Olympic Steel. We will be participating in the Sidoti & Company MicroCap Virtual Conference, and that's on May 11th. The KeyBanc Industrials Conference in Boston on May 31st, and the KeyBanc Steel Roundtable series in New York City in late June. To conclude, I just wanna thank the Olympic team for a great start to 2023. We're really excited about our future, and we look forward to talking with all of you again soon. Thank you and have a great day. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.