Reliance Inc (RS) 2022 Q3 法說會逐字稿

Greetings, and welcome to the Reliance Steel & Aluminum Company Third Quarter 2022 Earnings Conference Call. (Operator Instructions)

您好，歡迎來到 Reliance Steel & Aluminum Company 2022 年第三季度收益電話會議。 （操作員說明）

It is now my pleasure to introduce your host, Ms. Kim Orlando.

現在我很高興向您介紹主持人 Kim Orlando 女士。

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's third quarter 2022 financial results. I am joined by Jim Hoffman, CEO; Karla Lewis, President; and Arthur Ajemyan, Senior Vice President and CFO. Steve Koch, Executive Vice President and Chief Operating Officer, will also be available during the question-and-answer portion of today's call.

謝謝你，運營商。早上好，感謝大家參加我們的電話會議，討論 Reliance 2022 年第三季度的財務業績。首席執行官吉姆·霍夫曼 (Jim Hoffman) 加入了我的行列；卡拉·劉易斯，總裁；高級副總裁兼首席財務官 Arthur Ajemyan。執行副總裁兼首席運營官 Steve Koch 也將出席今天電話會議的問答環節。

A recording of this call will be posted on the Investors section of our website at investor.rsac.com. The press release and the information on this call may contain certain forward-looking statements which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainties or other factors, including the impacts of inflation, geopolitics and the COVID-19 pandemic and related economic conditions on our future operations, which may not be under the company's control and may cause the actual results, performance or achievement of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K for the year ended December 31, 2021, under the caption Risk Factors, disclosure in our press release this morning, and other documents, Reliance files or furnishes with the Securities and Exchange Commission. The press release and the information on this call speak only as of today's date, and the company disclaims any duty to update the information provided therein and herein.

此次通話的錄音將發佈在我們網站 investor.rsac.com 的“投資者”部分。新聞稿和本次電話會議的信息可能包含某些前瞻性陳述，這些陳述基於許多可能發生變化的假設，並涉及已知和未知的風險、不確定性或其他因素，包括通貨膨脹、地緣政治和COVID-19 大流行和相關經濟狀況對我們未來運營的影響，這可能不受公司控制，並可能導致公司的實際結果、業績或成就與這些前瞻性暗示的結果、業績或其他預期存在重大差異- 看起來陳述。這些因素包括但不限於公司在截至 2021 年 12 月 31 日的 10-K 表格年度報告中風險因素標題下披露的因素、今天上午在我們的新聞稿中披露的內容以及其他文件， Reliance 向證券交易委員會提交文件或提供資料。本次電話會議的新聞稿和信息僅在今天發表，公司不承擔更新其中和此處提供的信息的任何義務。

I will now turn the call over to Jim Hoffman, CEO of Reliance.

我現在將把電話轉給 Reliance 的首席執行官吉姆霍夫曼。

Thank you, Kim. Good morning, everyone, and thank you all for joining us today to discuss our third quarter 2022 financial results.

謝謝你，金。大家早上好，感謝大家今天加入我們討論我們 2022 年第三季度的財務業績。

Before I begin, I'd like to mention the announcement we issued 2 weeks ago regarding our executive leadership succession plan. After much personal deliberation, I have decided to step down as CEO of Reliance on December 31 of this year. I am very pleased that Karla will succeed me as the Reliance Chief Executive Officer on January 1, 2023, at which time I will transition to the role of Senior Advisor to facilitate the transition of my responsibilities to Karla until my retirement in December of 2023. And I will also retain my seat on the Reliance Board.

在開始之前，我想提一下我們兩週前發布的關於我們的行政領導繼任計劃的公告。經過個人深思熟慮，我決定於今年 12 月 31 日辭去 Reliance 首席執行官一職。我很高興 Karla 將於 2023 年 1 月 1 日接替我擔任 Reliance 首席執行官，屆時我將轉任高級顧問一職，以促進將我的職責移交給 Karla，直至我於 2023 年 12 月退休。我還將保留我在 Reliance Board 的席位。

This announcement is the culmination of a deliberate long-term strategic succession plan developed in conjunction with our Board of Directors. I've had a good fortune and great privilege to work very closely with Karla for many years, and I know that our customers, suppliers, stockholders and colleagues will be in very good hands with her at the helm. Karla is a proven leader and executive and I'm extremely confident that she is the right person to lead Reliance going forward. I'm very proud of many accomplishments we've achieved at Reliance over the last several years, and I am extremely grateful for the great opportunity and privilege to have been the CEO of this wonderful family of companies.

本公告是與我們的董事會共同製定的深思熟慮的長期戰略繼任計劃的最終結果。多年來，我有幸和莫大的榮幸與 Karla 密切合作，我知道我們的客戶、供應商、股東和同事會在她的領導下得到很好的照顧。 Karla 是一位久經考驗的領導者和高管，我非常相信她是領導 Reliance 前進的合適人選。我為過去幾年我們在 Reliance 取得的許多成就感到非常自豪，我非常感謝有機會和榮幸成為這個優秀公司家族的首席執行官。

I will begin now with an overview of our performance and capital allocation activities in the third quarter. Karla will then speak to our operating results and demand trends by end markets, and Arthur will conclude with a review of our financial results and our fourth quarter outlook.

我現在將首先概述我們第三季度的業績和資本配置活動。然後，Karla 將介紹我們的經營業績和終端市場的需求趨勢，Arthur 將回顧我們的財務業績和第四季度展望。

Turning to our third quarter results. Reliance's proven business model, including our diverse operations and commitment to best-in-class customer service produced another quarter of solid financial performance. Demand was somewhat better than we had anticipated in the majority of the end markets we serve, which coupled with outstanding operational execution drove strong quarterly net sales of $4.25 billion. As anticipated, metal price declines during the quarter led to a temporary compression of our gross profit margin but we nonetheless achieved strong diluted earnings per share of $6.45, which were the highest in our history for a third quarter.

轉向我們的第三季度業績。 Reliance 經過驗證的商業模式，包括我們多元化的運營和對一流客戶服務的承諾，又帶來了四分之一的穩健財務業績。在我們服務的大多數終端市場，需求比我們預期的要好一些，再加上出色的運營執行力，推動了 42.5 億美元的強勁季度淨銷售額。正如預期的那樣，本季度金屬價格下跌導致我們的毛利率暫時壓縮，但我們仍然實現了 6.45 美元的強勁稀釋每股收益，這是我們歷史上第三季度的最高水平。

We believe our third quarter results highlight the resilience of our unique business model, which along with consistent, strong operational execution by all of our colleagues enabled strong performance during volatile pricing and demand environments. In the third quarter, our diversification strategy benefited our results as the recovery in certain areas such as aerospace, energy and semiconductor helped moderate declines in our third quarter average selling price, gross profit margins and tons sold and our performance of value-added processing on approximately 50% of the orders contributed to our industry-leading gross profit margin profile and provided stability to our gross profit margin despite declining metal prices.

我們相信，我們第三季度的業績凸顯了我們獨特業務模式的彈性，再加上我們所有同事始終如一、強有力的運營執行力，在價格和需求波動的環境中實現了強勁的業績。第三季度，我們的多元化戰略有利於我們的業績，因為航空航天、能源和半導體等某些領域的複蘇幫助我們第三季度的平均售價、毛利率和銷售噸數以及我們的增值加工表現有所下降。儘管金屬價格下跌，約 50% 的訂單為我們行業領先的毛利率做出了貢獻，並為我們的毛利率提供了穩定性。

Another key attribute of the Reliance model is our strong cash flow generation. During the third quarter, we generated record quarterly cash flow from operations of $635.7 million, driven by ongoing strength in our profitability combined with effective working capital management, which helps fuel our growth both and long-standing history of solid stockholder returns.

Reliance 模型的另一個關鍵屬性是我們強大的現金流生成。在第三季度，我們的運營產生了創紀錄的季度現金流量 6.357 億美元，這得益於我們持續強勁的盈利能力和有效的營運資本管理，這有助於推動我們的增長和長期穩定的股東回報歷史。

Our focus on growth remains balanced between organic and acquisition opportunities. Our full year capital expenditure budget remains at $455 million, with an expected total cash outlay of $300 million to $350 million depending on ongoing extended lead times throughout the supply chain. While we did not complete any acquisitions during the third quarter, the pipeline of potential opportunities remains healthy.

我們對增長的關注在有機和收購機會之間保持平衡。我們的全年資本支出預算保持在 4.55 億美元，預計總現金支出為 3 億至 3.5 億美元，具體取決於整個供應鏈中持續延長的交貨時間。雖然我們在第三季度沒有完成任何收購，但潛在機會的渠道仍然健康。

We're also pleased to return nearly $390 million to our stockholders in the third quarter through a combination of quarterly dividends and common stock repurchases. Arthur will elaborate on our stockholder return activity shortly. In closing, despite increased uncertainties, we are confident our managers in the field will successfully navigate pricing headwinds and inflationary pressures on operating costs as they have in the past to deliver superior performance. Our record cash flow from operations positions us very well to continue to invest in and grow our businesses as we anticipate increased opportunities from the infrastructure bill and reshoring trends in the United States.

我們也很高興在第三季度通過季度股息和普通股回購相結合的方式向我們的股東返還近 3.9 億美元。亞瑟將很快詳細說明我們的股東回報活動。最後，儘管不確定性增加，但我們相信我們在該領域的管理人員將成功應對定價逆風和運營成本的通脹壓力，就像他們過去所做的那樣，以提供卓越的績效。我們創紀錄的運營現金流使我們非常有能力繼續投資和發展我們的業務，因為我們預計美國的基礎設施法案和回流趨勢會帶來更多機會。

Thank you for your time and attention today. I will now turn the call over to Karla, who will review our third quarter operating results and demand trends. Karla?

感謝您今天的時間和關注。我現在將電話轉給 Karla，他將審查我們第三季度的經營業績和需求趨勢。卡拉？

Thanks, Jim, and good morning, everyone. Before I begin, I would like to acknowledge Jim for his significant contributions to Reliance, both during his tenure as CEO and throughout his many years of service to our company. Jim's leadership helped us achieve sequential record-setting financial results, improved safety performance and inspired outstanding operational execution through varying economic environments and global pandemic. Thank you for your friendship and all that you have done for Reliance, Jim. I wish you all the best in your upcoming retirement.

謝謝，吉姆，大家早上好。在開始之前，我要感謝 Jim 在擔任 CEO 期間以及為我們公司服務多年期間對 Reliance 做出的重大貢獻。 Jim 的領導幫助我們在不同的經濟環境和全球大流行病中取得連續創紀錄的財務業績，提高安全績效並激發出色的運營執行力。謝謝你的友誼，感謝你為 Reliance 所做的一切，吉姆。祝您在即將到來的退休生活中一切順利。

I am honored to serve as Reliance's next CEO, and I am grateful for the trust and confidence that the board has placed in me. I'm excited to continue working together with our experienced and strong operational leadership as well as all of the incredibly talented people throughout Reliance to extend our history of delivering industry-leading results and increasing stockholder value.

我很榮幸擔任 Reliance 的下一任首席執行官，也感謝董事會對我的信任和信心。我很高興能繼續與我們經驗豐富、強大的運營領導層以及整個 Reliance 的所有才華橫溢的人一起工作，以延續我們提供行業領先成果和增加股東價值的歷史。

Now I'll turn to our third quarter operational performance. First and foremost, I'd like to thank our folks in the field for their solid execution during the quarter while navigating ongoing macroeconomic challenges, including historically high inflation, recessionary concerns, labor shortages and various other supply chain disruptions. Our steady leadership, focus on safety and commitment to customer service allowed us to once again outperform. Our tons sold were down 3.4% from the second quarter at the low end of our expected range of down 3% to 5%. Our shipment levels were impacted by normal seasonal patterns for the first time since 2019, which includes a decline in shipping volumes due to planned customer shutdowns and vacation schedules.

現在我將談談我們第三季度的運營業績。首先，我要感謝我們在該領域的人員在本季度穩健執行，同時應對持續的宏觀經濟挑戰，包括歷史高通脹、衰退擔憂、勞動力短缺和其他各種供應鏈中斷。我們穩定的領導、對安全的關注和對客戶服務的承諾使我們再次表現出色。我們的銷量比第二季度下降了 3.4%，處於我們預期下降 3% 至 5% 範圍的低端。自 2019 年以來，我們的出貨水平首次受到正常季節性模式的影響，其中包括由於計劃中的客戶停工和假期安排而導致的出貨量下降。

The better-than-expected performance was primarily driven by strong demand in nonresidential construction and ongoing healthy demand conditions in the broader manufacturing sector reliance serves and, to a lesser extent, robust semiconductor and aerospace shipments. Similar to the last several quarters, we believe our third quarter shipments could have been even stronger had it not been for the persistence of labor shortages and other supply chain-related disruptions at our customers' facilities.

業績好於預期的主要原因是非住宅建築的強勁需求和更廣泛的製造業依賴服務的持續健康需求狀況，以及在較小程度上強勁的半導體和航空航天出貨量。與過去幾個季度類似，我們相信，如果不是因為客戶設施持續存在勞動力短缺和其他與供應鏈相關的中斷，我們第三季度的出貨量可能會更強勁。

Our average selling price per ton sold of $3,039, declined 6.2% compared to record pricing in the second quarter of 2022 which was in line with our expectation of down 5% to 7%. Prices for carbon flat-rolled products have been declining through most of 2022 and seem to be at or near their trough. However, beginning in the second quarter, downward pricing pressure also extended to most of the other carbon steel products we sell along with stainless and aluminum products which continued through the third quarter.

我們每噸的平均售價為 3,039 美元，與 2022 年第二季度的創紀錄價格相比下降了 6.2%，這符合我們下降 5% 至 7% 的預期。到 2022 年的大部分時間，碳素壓延材的價格一直在下降，似乎已達到或接近谷底。然而，從第二季度開始，下行定價壓力也延伸到我們銷售的大多數其他碳鋼產品以及不銹鋼和鋁產品，這種壓力一直持續到第三季度。

That said, continued strong demand for the higher-priced products sold into the semiconductor, aerospace and energy markets helped offset some of the downward pricing pressure on our average selling price. While we believe we may see some continued pricing declines at more moderate levels, it's important to highlight that current pricing for most of the products we sell remains at historic highs. As we have experienced in prior cycles, declining pricing levels led to temporary compression in our gross profit margin during the third quarter of 2022 to 29.2%.

也就是說，對銷售到半導體、航空航天和能源市場的高價產品的持續強勁需求幫助抵消了我們平均售價的一些下行定價壓力。雖然我們認為我們可能會看到價格在更溫和的水平上持續下降，但重要的是要強調，我們銷售的大多數產品的當前價格仍處於歷史高位。正如我們在之前的周期中所經歷的那樣，價格水平下降導致我們的毛利率在 2022 年第三季度暫時壓縮至 29.2%。

On a non-GAAP FIFO basis, which is how we monitor our day-to-day operating performance, our gross profit margin declined to 28.6% from 32.2% in the prior quarter. I'd like to emphasize that we believe this gross profit margin compression will be temporary as we sell through our higher cost inventory. The benefit of Reliance's size is our ability to move our higher cost metal more quickly by utilizing our broad network of service centers.

根據非 GAAP FIFO 的基礎，這是我們監控日常經營業績的方式，我們的毛利率從上一季度的 32.2% 下降到 28.6%。我想強調的是，我們相信這種毛利率壓縮將是暫時的，因為我們會通過成本較高的庫存進行銷售。 Reliance 規模的優勢在於我們能夠利用我們廣泛的服務中心網絡更快地移動我們成本較高的金屬。

I'll now turn to a high-level overview of the trends we are seeing within our key end markets. Demand for nonresidential construction, which includes infrastructure and is the largest end market we serve, remained fairly stable with the second quarter of 2022 and ahead of last year's levels. Although not included in our tons sold, demand for the toll processing services we provide to the automotive market showed a notable improvement compared to the prior quarter despite ongoing supply chain challenges. Demand across the broader manufacturing sectors we serve, including industrial machinery, consumer products and heavy equipment experienced expected seasonal declines in the third quarter compared to the second quarter.

我現在將對我們在關鍵終端市場中看到的趨勢進行高層次的概述。非住宅建築的需求，包括基礎設施，是我們服務的最大終端市場，在 2022 年第二季度保持相當穩定，高於去年的水平。儘管不包括在我們的銷量中，但儘管供應鏈面臨持續挑戰，但與上一季度相比，我們向汽車市場提供的收費加工服務的需求顯著改善。與第二季度相比，我們服務的更廣泛製造業的需求，包括工業機械、消費品和重型設備，在第三季度經歷了預期的季節性下降。

And that said, our broader manufacturing sector improved compared to the third quarter of 2021 with underlying manufacturing demand remaining at healthy levels. Semiconductor demand remained robust during the third quarter and continues to be one of our strongest end markets. We're continuing to make significant investments in this important market to support the expansion of semiconductor fabrication in the United States.

也就是說，與 2021 年第三季度相比，我們更廣泛的製造業有所改善，基礎製造業需求保持在健康水平。半導體需求在第三季度保持強勁，並繼續成為我們最強勁的終端市場之一。我們將繼續在這個重要市場進行大量投資，以支持美國半導體製造的擴張。

Commercial aerospace demand continued to recover with our shipments improving over the second quarter and also year-over-year for the third consecutive quarter since the onset of the pandemic. As a reminder, roughly half of our exposure to aerospace is commercial. Demand in the military, defense and space portions of our aerospace business remains strong with healthy backlog. Finally, demand in the energy sector experienced normal seasonality compared to the second quarter of 2022. We are optimistic that underlying demand trends in the fourth quarter will remain healthy across most of the end markets we serve with continued pent-up demand at our customers carrying into 2023. We are confident our managers in the field will successfully navigate pricing headwinds and other obstacles as they have done many, many times in the past to continue Reliance's solid operating performance in the coming quarters. We appreciate the contributions made by each of our 15,000 colleagues every day.

商業航空航天需求繼續復甦，我們的出貨量在第二季度有所改善，自大流行開始以來連續第三個季度同比增長。提醒一下，我們接觸航空航天的大約一半是商業性的。我們航空航天業務的軍事、國防和太空部分的需求依然強勁，積壓情況良好。最後，與 2022 年第二季度相比，能源行業的需求經歷了正常的季節性。我們樂觀地認為，第四季度的基本需求趨勢將在我們服務的大多數終端市場保持健康，因為我們的客戶繼續被壓抑的需求到 2023 年。我們相信，我們在該領域的經理將成功克服定價逆風和其他障礙，因為他們過去曾多次這樣做，以在未來幾個季度繼續 Reliance 的穩健經營業績。我們感謝我們 15,000 名同事每天所做的貢獻。

I will now turn the call over to Arthur to review our financial results and provide more details on our demand and pricing outlook for the remainder of the year.

我現在將電話轉給 Arthur，以審查我們的財務業績，並提供有關今年剩餘時間的需求和定價前景的更多詳細信息。

Thanks, Karla. Good morning, everyone, and thank you for joining us today. First, I'd like to congratulate both Jim and Karla on their well-earned career transition. It remains my great privilege to work alongside these 2 legends of the metal service center industry.

謝謝，卡拉。大家早上好，感謝您今天加入我們。首先，我要祝賀 Jim 和 Karla 來之不易的職業轉型。與金屬服務中心行業的這兩位傳奇人物一起工作仍然是我的榮幸。

I'll start with our third quarter financial performance, which again demonstrated the strength and resilience of our model. We achieved our highest third quarter sales of $4.25 billion, which when combined with effective cost management, translated to earnings per share of $6.45, which was also a third quarter record. As Jim and Karla mentioned, healthy underlying demand for most of our products and services supported strong profitability during the third quarter. Our product diversity continues to benefit our operating results with limited exposure to hot-rolled coil, which has experienced the most pricing volatility over the last 24 months. Total carbon flat rolled sales including cold rolled and galvanized, which tend to follow HRC pricing, represented 17% of our sales dollars and 30% of our tons sold during the quarter. According to the Metals Service Center Institute, total carbon flat-rolled shipments in the third quarter of 2022 represented 68% of industry shipments.

我將從我們第三季度的財務業績開始，這再次證明了我們模型的實力和彈性。我們實現了 42.5 億美元的最高第三季度銷售額，再加上有效的成本管理，轉化為每股收益 6.45 美元，這也是第三季度的記錄。正如 Jim 和 Karla 所提到的，對我們大多數產品和服務的健康潛在需求支持了第三季度的強勁盈利能力。我們的產品多樣性繼續有利於我們的經營業績，熱軋卷的敞口有限，在過去 24 個月中價格波動最大。包括冷軋和鍍鋅在內的碳素平板軋材總銷售額（傾向於遵循 HRC 定價）佔本季度銷售額的 17% 和銷售噸數的 30%。根據金屬服務中心研究所的數據，2022 年第三季度碳素壓延材總出貨量佔行業出貨量的 68%。

Moving on to gross profit margins. Our non-GAAP gross profit margin declined 270 basis points from the second quarter as we work through higher cost inventory in a declining metal price environment, particularly for carbon and stainless flat-rolled products. To account for lower-than-anticipated metal costs, we reduced our annual LIFO expense estimate from $100 million to $30 million. And as a result, we recorded LIFO income of $27.5 million in the third quarter of 2022. Based on our revised full year estimate of $30 million of LIFO expense. Our current expectation for the fourth quarter of 2022 is $7.5 million of LIFO expense as we allocate our annual LIFO estimate on a pro rata basis to each reporting period. Consistent with our accounting policy, we will true-up to our actual LIFO calculation based on our on-hand inventory costs at the end of the year. As of September 30, 2022, the LIFO reserve on our balance sheet was $842.9 million, which will be available to benefit future period operating results and mitigate the impact of any further decline in metal prices on our gross profit and earnings.

轉向毛利率。我們的非 GAAP 毛利率比第二季度下降了 270 個基點，因為我們在金屬價格下降的環境下處理成本較高的庫存，尤其是碳和不銹鋼扁軋產品。考慮到低於預期的金屬成本，我們將後進先出法的年度費用估算從 1 億美元減少到 3000 萬美元。因此，我們在 2022 年第三季度錄得 2750 萬美元的後進先出收入。基於我們修訂後的全年 3000 萬美元後進先出費用估計。我們目前對 2022 年第四季度的預期是 750 萬美元的 LIFO 費用，因為我們將我們的年度 LIFO 估計按比例分配給每個報告期。根據我們的會計政策，我們將根據年底的現有庫存成本調整我們的實際 LIFO 計算。截至 2022 年 9 月 30 日，我們資產負債表上的 LIFO 準備金為 8.429 億美元，可用於受益於未來期間的經營業績，並減輕金屬價格進一步下跌對我們毛利和收益的影響。

Moving on to expenses. Our third quarter non-GAAP SG&A expenses decreased $18.2 million or 2.8% compared to the second quarter of 2022 due to lower freight and fuel costs on reduced shipments and some slight moderation and inflationary pressures on those expenses along with lower incentive-based compensation resulting from lower profitability. On a year-over-year basis, our third quarter same-store non-GAAP SG&A expenses were relatively flat with an increase of only $2.3 million or 0.4% as lower incentive-based compensation from lower FIFO pretax profit offset inflationary factors, including higher wages, freight, fuel and plant supply costs. Pretax income for the quarter, which totaled $524 million, declined by only 1.6% compared to the third quarter of 2021, despite a 230 basis point year-over-year decline in our gross profit margin.

繼續討論費用。我們第三季度的非 GAAP SG&A 費用與 2022 年第二季度相比減少了 1820 萬美元或 2.8%，原因是出貨量減少導致運費和燃料成本降低，這些費用略有放緩和通貨膨脹壓力，以及由於以下原因導致基於激勵的補償減少較低的盈利能力。與去年同期相比，我們第三季度的同店非 GAAP SG&A 費用相對持平，僅增加 230 萬美元或 0.4%，這是因為較低的 FIFO 稅前利潤導致較低的基於激勵的薪酬抵消了通脹因素，包括較高的工資、運費、燃料和工廠供應成本。本季度稅前收入總計 5.24 億美元，與 2021 年第三季度相比僅下降 1.6%，儘管我們的毛利率同比下降 230 個基點。

We were able to offset the bulk of the decline in our gross profit margin via higher selling prices of 6.2% and higher tons sold of 3.5%, which included contributions from our fourth quarter 2021 acquisitions. Our third quarter 2022 diluted earnings per share of $6.45, a record for the third quarter, were up about 5% from the third quarter of 2021 despite relatively flat pretax and net income levels due to a reduction in our outstanding common shares of about 6% during the past 12 months from our share repurchases.

我們能夠通過更高的售價 6.2% 和更高的銷量 3.5% 來抵消毛利率的大部分下降，其中包括我們 2021 年第四季度收購的貢獻。我們的 2022 年第三季度攤薄後每股收益為 6.45 美元，創下第三季度的歷史新高，比 2021 年第三季度增長約 5%，儘管由於我們的已發行普通股減少了約 6%，稅前和淨收入水平相對持平在過去 12 個月內，我們的股票回購。

We generated record quarterly cash flow from operations of $635.7 million during the quarter, and we invested $95.5 million in capital expenditures and returned nearly $390 million to our stockholders through a $52.9 million of cash dividends and $336.7 million of stock repurchases at an average cost of approximately $178.79 per share. As a reminder, our Board of Directors replenished our repurchase authorization to $1 billion on July 26, 2022, reaffirming our collective confidence in our long-term strategy and outlook. Approximately $763 million remained available for repurchases under our $1 billion share repurchase authorization at September 30, 2022.

我們在本季度產生了創紀錄的 6.357 億美元的季度運營現金流，我們投資了 9550 萬美元用於資本支出，並通過 5290 萬美元的現金股息和 3.367 億美元的股票回購以平均成本約為每股 178.79 美元。提醒一下，我們的董事會於 2022 年 7 月 26 日將我們的回購授權補充到 10 億美元，重申了我們對我們的長期戰略和前景的集體信心。截至 2022 年 9 月 30 日，根據我們 10 億美元的股票回購授權，仍有約 7.63 億美元可用於回購。

I'll now turn to our fourth quarter outlook. We expect healthy demand trends to continue into the fourth quarter despite prevailing macroeconomic uncertainty, along with other external factors such as inflation, ongoing supply chain disruptions and geopolitical matters. We do, however, expect shipment levels to be impacted by normal seasonal patterns, including fewer shipping days in the fourth quarter compared to the third quarter, and our customers extended holiday shutdowns and vacation schedules. Accordingly, we estimate our tons sold will be down 6.5% to 8.5% in the fourth quarter of 2022 compared to the third quarter of 2022 or approximately flat to up 2% compared to the fourth quarter of 2021.

我現在轉向我們的第四季度展望。儘管普遍存在宏觀經濟不確定性以及通脹、持續供應鏈中斷和地緣政治問題等其他外部因素，但我們預計健康的需求趨勢將持續到第四季度。然而，我們確實預計出貨量會受到正常季節性模式的影響，包括第四季度的出貨天數比第三季度少，以及我們的客戶延長假期停工和休假時間表。因此，我們估計與 2022 年第四季度相比，我們的銷量將在 2022 年第四季度下降 6.5% 至 8.5%，或者與 2021 年第四季度相比大致持平至增長 2%。

As Karla alluded to with regard to pricing, we expect continued declines for many of our products, notably for carbon stainless and aluminum flat rolled products to be offset by relatively stable pricing for certain higher-value products sold into the aerospace, energy, and semiconductor end markets, which continue to mitigate the overall decline in our average selling price per ton sold. As a result, we estimate our average selling price per ton sold in the fourth quarter of 2022 will be down 6% to 8% compared to the third quarter of 2022. We also expect continued pressure on our gross profit margin in the fourth quarter, which we expect to be temporary as a result of selling higher cost inventory into a declining metal price environment.

正如 Karla 在定價方面提到的那樣，我們預計我們許多產品的持續下降，特別是碳不銹鋼和鋁壓延產品將被航空航天、能源和半導體中某些高價值產品相對穩定的定價所抵消終端市場，這繼續減輕了我們每噸平均售價的整體下降。因此，我們估計我們在 2022 年第四季度的每噸平均售價將比 2022 年第三季度下降 6% 至 8%。我們還預計第四季度的毛利率將繼續面臨壓力，由於在金屬價格下跌的環境中出售成本較高的庫存，我們預計這將是暫時的。

Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $4.30 to $4.50 for the fourth quarter of 2022. In closing, I'd like to reiterate that we are very pleased with our third quarter performance against the challenging backdrop of uncertain market dynamics. Nevertheless, our strong profitability and cash generation enabled us to continue making investments in the growth of our business while concurrently providing significant returns to our stockholders. Thank you to all of our Reliance colleagues for your contributions to these results.

基於這些預期，我們預計 2022 年第四季度的非 GAAP 每股攤薄收益在 4.30 美元至 4.50 美元之間。最後，我想重申，我們對第三季度的業績非常滿意，以應對充滿挑戰的挑戰不確定的市場動態背景。儘管如此，我們強大的盈利能力和現金生成能力使我們能夠繼續投資於業務增長，同時為我們的股東提供可觀的回報。感謝我們所有的 Reliance 同事為這些結果做出的貢獻。

This concludes our prepared remarks. Thank you for your attention. And at this time, we'd like to open the call up to questions. Operator?

我們準備好的發言到此結束。感謝您的關注。此時，我們想公開提問。操作員？

(Operator Instructions) Our first question today is coming from Phil Gibbs of KeyBanc.

（操作員說明）我們今天的第一個問題來自 KeyBanc 的 Phil Gibbs。

Wanted to, first of all, congratulate my Ohio friends and Jim and Karla. Congratulations to the both of you. Karla, obviously, for your promotion and Jim for your service and value creation.

首先，我想祝賀我的俄亥俄州朋友以及吉姆和卡拉。祝賀你們倆。顯然，Karla 是為了你的晉升，而 Jim 是為了你的服務和價值創造。

First question here is just on net working capital in the fourth quarter and what you're anticipating. Should we think that the release could be of equal size is, what you realized in the third quarter? Could it be a little better?

這裡的第一個問題只是關於第四季度的淨營運資金以及您的預期。我們是否應該認為發布的規模可能相同，您在第三季度實現了什麼？能不能好一點？

Yes. Good question, Phil. And as we've said for working capital follows our volume and pricing guidance. So that a good way to think about it. Receivables are a lot more responsive to pricing changes than inventories, the inventory decline could be seasonal as well. So I think short answer is, take a look at our guidance, we're pricing and volume for the fourth quarter and apply those to working capital levels, and they should give you a good framework to come up with an estimate for working capital adjustments for the fourth quarter.

是的。好問題，菲爾。正如我們所說的營運資金遵循我們的數量和定價指導。所以這是一個很好的思考方式。應收賬款對價格變化的反應比庫存要快得多，庫存下降也可能是季節性的。所以我認為簡短的回答是，看看我們的指導，我們正在為第四季度定價和數量，並將其應用於營運資金水平，他們應該給你一個很好的框架來估計營運資金調整第四季度。

Yes. And I would just add to that, Phil, in the third quarter, we did have a bit of a focus internally on bringing inventory levels down at a couple of our FOCs. Nothing significant. Our inventories have been in pretty good shape, but at a few places, we were a little heavy. So there was probably a little extra cash flow generation in Q3 because of that focus.

是的。我只想補充一點，Phil，在第三季度，我們確實在內部將重點放在降低幾個 FOC 的庫存水平上。沒什麼大不了的。我們的庫存狀況一直很好，但在一些地方，我們有點沉重。因此，由於這種關注，第三季度可能會產生一些額外的現金流。

Okay. And then I know you did quite a flurry of acquisitions in the latter part of last year. What's your appetite for M&A right now given what looks to be increasingly solid cash flow visibility for the next several quarters?

好的。然後我知道你在去年下半年進行了大量收購。鑑於未來幾個季度的現金流可見度看起來越來越穩固，您現在對併購的胃口是什麼？

Yes, good question. Our appetite is as strong as it's ever been. It's just a matter of finding the right company and finding companies that are for sale that we think will fit in our family of companies, and we're still looking -- we're looking at a lot. There's a few out there, Phil, that are simply fishing, if you know what I'm talking about. They're just for sale to see if anybody is kind of crazy enough to spend what they want for them. So there's a few of those, but the good news is there's plenty of really fine companies out there. And I can promise you we'll keep looking at them, and we'll if a good one comes up and we can strike a deal, we'll do it. But as far as our appetite, it hasn't changed at all. And more important, we haven't lowered our bar. So that's still a major part of our growth strategy.

是的，好問題。我們的胃口一如既往地旺盛。這只是找到合適的公司並找到我們認為適合我們公司家族的待售公司的問題，我們仍在尋找——我們正在尋找很多。如果你知道我在說什麼，菲爾，那裡有一些只是在釣魚。他們只是為了出售，看看是否有人瘋狂到願意為他們花他們想要的東西。所以有一些這樣的公司，但好消息是那裡有很多非常優秀的公司。我可以向你保證，我們會繼續關注它們，如果出現一個好的，我們會達成協議，我們會做的。但就我們的胃口而言，它根本沒有改變。更重要的是，我們沒有降低標準。所以這仍然是我們增長戰略的重要組成部分。

And then last question is just on your internal investments, the semis plant you have coming on, I believe, in Texas. Just remind us about what you have left to spend there when it ramps and maybe some also some color in terms of what you're seeing in terms of demand in that silo.

最後一個問題是關於你的內部投資，我相信你在德克薩斯州的半成品工廠。只是提醒我們當它增加時你還剩下什麼可以花在那裡，也許還有一些顏色就你在筒倉中看到的需求而言。

Yes. So I'll try to hit that for you. So we actually kind of have a 2-step expansion going on in Texas. The smaller plant where we'll be kind of welding bulk gas distribution systems for our customers. That we expect -- that's the smaller part of the expansion, that we expect to become operational first quarter of 2023. And then the more significant investment, well, we expect to be operational at the beginning of first quarter of 2024. There we'll be doing some electropolishing and cleaning of a lot of stainless steel tubing we sell into kind of the construction of the chip manufacturing plant. So our outlook there is good, the spend -- so most of that -- a small part will be in -- it actually could be even in the 2 years because construction is underway on the larger plant, and we'll be starting to move into the smaller plant in the near future.

是的。所以我會盡力為你做到這一點。所以我們實際上在得克薩斯州進行了兩步擴張。我們將為客戶焊接散裝氣體分配系統的小型工廠。我們預計 - 這是擴張的較小部分，我們預計將在 2023 年第一季度投入運營。然後是更重要的投資，我們預計將在 2024 年第一季度初投入運營。我們'我們將對我們銷售的大量不銹鋼管進行電解拋光和清潔，以用於芯片製造廠的建設。所以我們的前景很好，支出 - 所以大部分 - 一小部分將用於 - 實際上甚至可能在 2 年內，因為更大的工廠正在進行建設，我們將開始在不久的將來搬進較小的工廠。

Big for us because the majority of our CapEx projects are maybe $1 million to $500,000 to $2 million. This one is a little larger. But we gave the expected total cash outlay of CapEx for this year of $300 million to $350 million. We were at $250 million year-to-date at the end of September. So that's all kind of factored into the cash expectation going forward. But semiconductor, we know there have been some announcements by some of the chip manufacturers and related businesses with layoffs and cutting production. But our folks the particular products they're selling and who they're selling into feel that semiconductor is going to be strong for the rest of the year and going into at least the first half of next year.

對我們來說很重要，因為我們的大部分資本支出項目可能在 100 萬到 500,000 到 200 萬美元之間。這個有點大。但我們預計今年資本支出的現金支出總額為 3 億至 3.5 億美元。截至 9 月底，我們今年迄今的收入為 2.5 億美元。因此，這已成為未來現金預期的全部因素。但是半導體，我們知道一些芯片製造商和相關企業已經宣布裁員和減產。但是我們的人，他們銷售的特定產品以及他們銷售的對像都認為半導體在今年剩餘時間裡會很強勁，並且至少會進入明年上半年。

And just one thing to add, and I know you know this, Phil, but that's this big project we've undertaken, that's just part of this whole reshoring thing, and it's legit. There's a lot to it. And this one has been framed as a computer chip support spend. But it's -- there's a bigger picture there. This reshoring, near shoring, whatever they're calling this week is real, and we're pumped up about it. It's going to fit right in our wheelhouse, and we'll look forward to more.

還有一件事要補充，我知道你知道這一點，菲爾，但這是我們進行的這個大項目，這只是整個回流工作的一部分，而且是合法的。有很多。而這個已經被誣陷為計算機芯片支持支出。但它 - 那裡有更大的圖景。這種回流，接近回流，無論他們本周稱之為什麼，都是真實的，我們對此感到興奮。它將適合我們的駕駛室，我們期待更多。

(Operator Instructions) The next question is coming from Martin Englert of Seaport Research.

（操作員說明）下一個問題來自 Seaport Research 的 Martin Englert。

Can you talk a little bit maybe your thoughts on nonresidential construction and infrastructure moving through next year? Maybe what some of your customers are saying, anticipating, in particular, any exposure to intermediate fabricators and how their order books activity are looking?

你能談談你對明年非住宅建築和基礎設施的看法嗎？也許您的一些客戶在說什麼，特別是期待與中間製造商的任何接觸以及他們的訂單活動如何？

Yes. So I would say at a high level, Martin, we're still very positive on non-res construction. And remember -- and we put infrastructure in that as well. And remember that we're primarily participating in kind of the 4- to 5-story building and below. So we continue -- our customers continue to tell us they've got healthy backlogs going into 2023. So overall, we're positive based on what they're telling us, and...

是的。所以我想說，在高層次上，馬丁，我們對非資源建設仍然非常積極。請記住——我們也將基礎設施放入其中。請記住，我們主要參與 4 到 5 層及以下的建築。所以我們繼續——我們的客戶繼續告訴我們，到 2023 年他們的積壓情況良好。所以總的來說，根據他們告訴我們的情況，我們是積極的，並且......

And just one thing on the infrastructure bill. We've been talking about this for years, and it's done nothing, but gotten worse. I'm a little bit tired of seeing politicians having the press conferences on the end of a dilapidated bridge saying, as soon as we get this fixed, I'm going to walk across it. Well, that's interesting. It's time to start doing something about it. So it's going to come. It's going to come at one point, soon, I think. And we've been saying for years that Reliance is -- America is going to need Reliance to rebuild. And that's true, and we stand ready, and we'll look forward to politics to kind of get out of the way and for our real tax payments we've made over the years to go to work for American. So infrastructure is extremely important and when it comes, we're ready.

基礎設施法案上只有一件事。我們多年來一直在談論這個，但它什麼也沒做，反而變得更糟。我有點厭倦看到政客們在一座破舊的橋的盡頭舉行新聞發布會說，一旦我們修好了，我就會走過去。嗯，這很有趣。是時候開始做點什麼了。所以它會來的。它會在某一時刻到來，很快，我想。多年來我們一直在說 Reliance 是——美國將需要 Reliance 來重建。這是真的，我們做好了準備，我們期待政治能夠擺脫困境，並期待我們多年來為美國人工作所支付的實際稅款。所以基礎設施非常重要，當它到來時，我們已經準備好了。

Okay. If I could one other on the reshoring, we've talked about some of the semiconductor activity, but where else are you seeing it? What other, I guess, verticals or end markets? Are you seeing activity coming back state side?

好的。如果我可以就回流問題進行交流，我們已經討論了一些半導體活動，但您還在哪裡看到它？我猜還有什麼垂直市場或終端市場？你看到活動回歸州了嗎？

Well, the computer chips is the most obvious one. That's the one that's getting all the price. But you can hear it and you see it in automotive, appliance, those types of things. And remember, it's pretty -- it's kind of difficult for us because we have so many transactions and so many different companies that sell to so many different markets, they don't necessarily tell us where it's all going. But it feels like and looks like and what we've heard, these are -- this is work that's coming back.

嗯，電腦芯片是最明顯的。那就是得到所有價格的那個。但是你可以在汽車、電器等類型的東西中聽到和看到它。請記住，它很漂亮 - 這對我們來說有點困難，因為我們有這麼多交易和這麼多不同的公司向這麼多不同的市場銷售產品，他們不一定告訴我們它的去向。但感覺和看起來像以及我們所聽到的，這些是 - 這是正在回歸的工作。

Certainly, nonresidential construction spend over the last several years lends itself to that. There's manufacturing buildings being rebuilt and expanded. We've been expanding and expanding. Those are all, I think, telltale signs of reshoring and near-shoring. There's some things going on in Mexico that we'll continue to look at. There's mills buying or spending money to increase capabilities. And that's another sign of what may be coming our way. So nothing can really -- it's hard for us to literally nail down where all these orders are going, but we know it's happening.

當然，過去幾年的非住宅建築支出有助於這一點。有正在重建和擴建的製造廠房。我們一直在擴大和擴大。我認為，這些都是回流和近岸回流的明顯跡象。我們將繼續關注墨西哥正在發生的一些事情。有工廠購買或花錢來提高能力。這是我們可能會遇到的另一個跡象。所以沒有什麼可以真正 - 我們很難確定所有這些訂單的去向，但我們知道它正在發生。

Yes. I mean we do hear from the field, Martin. There are -- a lot of our customers are bringing certain components or different processes back and doing them in-house or doing them closer to their U.S. operations. They're not big public headlines when they're doing this, but we're definitely in that it is real, as Jim was saying, in a lot of different areas. So we think that's good for us and good for the American economy.

是的。我的意思是我們確實聽到了現場的消息，馬丁。有——我們的許多客戶正在將某些組件或不同的流程帶回來並在內部進行，或者在離他們的美國業務更近的地方進行。當他們這樣做時，他們並沒有成為公眾頭條新聞，但我們絕對相信，正如吉姆所說，它在很多不同領域都是真實的。所以我們認為這對我們和美國經濟都有好處。

If I could one last one on the labor dynamics, if you see any easing there that would maybe allow more activity to push forward moving through next year? And then along the same lines, there was backlogs of activity that had built moving past COVID, out of COVID there, how that's looking, whether that's kind of still sustaining and supporting some layer of demand out there?

如果我可以最後一個關於勞動力動態的問題，你是否看到那裡有任何放鬆措施可能會讓更多的活動推動明年的發展？然後沿著同樣的路線，積壓的活動已經超過 COVID，從 COVID 那裡移出，這看起來如何，這是否仍在維持和支持那裡的某種需求層？

That's a great question. I think it's -- we just keep watching it. I can tell you from a Reliance standpoint, I think we've done a really fine job of retaining talent, which is not easy to do. We've done a good job of attracting talent, which is a whole different level of activity, and we're paying attention to that. Our customers are having a tough go, and that's hard to see.

這是一個很好的問題。我認為這是 - 我們只是繼續關注它。我可以從 Reliance 的角度告訴你，我認為我們在留住人才方面做得非常好，這並不容易做到。我們在吸引人才方面做得很好，這是一種完全不同的活動水平，我們正在關注這一點。我們的客戶處境艱難，很難看到。

However, it kind of lends itself to our growth because if they can't find the right people and they can't spend the money they need to spend, we can and we do, and we will, and we have. So I'm not -- I don't really know what next month is going to bring, but we would love to have more folks, and I know our customers love to have more folks. And it's just a matter of recruiting the right people and convincing people that having a career in this industry is a good thing. So Karla, do you have anything to add to that?

然而，它在某種程度上有助於我們的成長，因為如果他們找不到合適的人並且他們不能花他們需要花的錢，我們可以而且我們會做，我們會，我們已經。所以我不是——我真的不知道下個月會發生什麼，但我們希望有更多的人，而且我知道我們的客戶喜歡有更多的人。這只是招募合適的人並讓人們相信在這個行業擁有一份職業是件好事的問題。 Karla，你有什麼要補充的嗎？

Yes. I mean I would say, Martin, it's we've been a little more successful, I think, in recruiting more people in the workforce over the last few months than we had seen prior to that. So we've seen some improvement there, but I support all of Jim's comments. And the other thing, too, this is an issue that we're facing and others are facing. And we are looking to see how we can potentially automate more in our various operations. We're looking at technology that's out there. I can't tell you it's going to be a huge change in a year, but we're certainly looking to invest more to help alleviate some of the pressure from the workforce now where it is more difficult to fill some of the positions in our industry and our customers' industry.

是的。我的意思是，我想說，馬丁，我認為，過去幾個月我們在招聘更多員工方面比之前看到的要成功一些。所以我們看到了一些改進，但我支持 Jim 的所有評論。另一件事，這也是我們和其他人面臨的問題。我們正在尋找如何在我們的各種操作中實現更多自動化的可能性。我們正在研究現有的技術。我不能告訴你這將在一年內發生巨大變化，但我們肯定會尋求更多投資，以幫助減輕勞動力的一些壓力，因為現在更難填補我們的一些職位行業和我們客戶的行業。

Congratulations on the solid results.

祝賀你取得了不錯的成績。

The next question is coming from Katja Jancic of BMO.

下一個問題來自 BMO 的 Katja Jancic。

Could you talk a little bit about the outlook for CapEx for 2023. I know it's early, and I know some of the CapEx in 2022 is being pushed out because of supply chain issues, but could you just provide some preliminary outlook directionally.

你能談談 2023 年資本支出的前景嗎？我知道現在還早，而且我知道 2022 年的一些資本支出由於供應鏈問題而被推遲，但你能否提供一些初步的方向性展望。

So we are in the process of early parts of the process of putting together our 2023 capital expenditure budget. It's built from the ground up. Our folks out in the field identify opportunities by working with their customers. But we continue to see a lot of opportunity for us to continue to grow both by expanding facilities, greenfield facilities, but also a lot of value-added processing equipment to do more for our customers.

因此，我們正處於編制 2023 年資本支出預算的早期階段。它是從頭開始構建的。我們在該領域的人員通過與客戶合作來發現機會。但我們繼續看到我們有很多機會通過擴大設施、綠地設施以及大量增值加工設備來為我們的客戶做更多的事情來繼續增長。

So I think it's going to be healthy. We don't have a number yet. We'll give you that in February. But we anticipate -- especially from a cash spend standpoint, probably consistent with this year. And hopefully, some of the supply chain issues will improve, and we can catch up a little bit to maybe even have a slightly higher cash spend next year. But we'll have more information on that in February for you.

所以我認為它會很健康。我們還沒有數字。我們將在 2 月份為您提供。但我們預計 - 特別是從現金支出的角度來看，可能與今年一致。希望一些供應鏈問題會得到改善，我們可以趕上一點，明年的現金支出甚至可能略高。但我們會在 2 月份為您提供更多相關信息。

Okay. And maybe just one more on the value-added processing. Can you talk about how much of orders right now include value-added processing? And how do you see this going forward? Do you see any significant changes to that, especially when there's a possibility that in a downturn, your customers might be focusing on cost savings?

好的。也許還有一個關於增值處理的問題。你能談談現在有多少訂單包括增值加工？你如何看待這件事的進展？您是否看到任何重大變化，尤其是在經濟低迷時期，您的客戶可能會關注成本節約？

Well, I like what you said. I agree with that, that kind of answers the second part of your question. But just a little historical point. For a while, we were at about 40% of the orders we sold. We're up over 50% now. Where can it go from there, north, I'm not going to burden our next CEO with a number, but my guess will be north of that because exactly what you said. I think our customers are going to need more work along those lines, and we certainly are spending the money in the right ways and to agree with Karla about the automation. That's where we're spending our money. And I think in the future, that will just mean good things for Reliance and that will be a good thing for our customers as well.

嗯，我喜歡你說的。我同意這一點，這回答了你問題的第二部分。但只是一點點歷史意義。有一段時間，我們的訂單銷售量約為 40%。我們現在上漲了 50% 以上。它可以從那裡去哪裡，北方，我不會給我們的下一任首席執行官增加一個數字，但我的猜測會是北方，因為正是你所說的。我認為我們的客戶將需要在這些方面做更多的工作，我們當然會以正確的方式花錢，並同意 Karla 對自動化的看法。那就是我們花錢的地方。我認為在未來，這對 Reliance 來說是好事，對我們的客戶來說也是好事。

At this time, I'd like to turn the floor back over to Mr. Hoffman for any additional or closing comments today.

現在，我想將發言權轉回霍夫曼先生，聽取今天的任何補充意見或結束意見。

Yes. Thank you all for your time and attention today. Before we close out the call, I'd like to remind everyone that we'll be in New York City in late November, presenting at the Goldman Sachs Global Metals and Mining Conference. And I'd like to thank my colleagues out in the field throughout the Reliance family of companies for their strong performance in the third quarter, and thank you all for your contribution and support and your commitment to Reliance. Thank you.

是的。感謝大家今天的時間和關注。在我們結束電話會議之前，我想提醒大家，我們將於 11 月下旬在紐約市出席高盛全球金屬和礦業會議。我要感謝我在整個 Reliance 家族公司領域的同事在第三季度的強勁表現，並感謝大家的貢獻和支持以及對 Reliance 的承諾。謝謝你。

Ladies and gentlemen, thank you for your participation and interest in Reliance. You may disconnect your lines and log off the webcast at this time, and enjoy the rest of your day.

女士們，先生們，感謝您對 Reliance 的參與和興趣。此時您可以斷開線路並退出網絡廣播，然後享受接下來的一天。