Reliance Inc (RS) 2023 Q2 法說會逐字稿

Greetings, and welcome to Reliance Steel & Aluminum Company's Second Quarter 2023 Earnings Call. (Operator Instructions) this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando with Addo Investor Relations. Thank you. You may begin.

您好，歡迎參加信實鋼鐵鋁業公司 2023 年第二季度財報電話會議。 （操作員指示）本次會議正在錄製中。現在我很高興向您介紹主持人，阿多投資者關係部的金·奧蘭多 (Kim Orlando)。謝謝。你可以開始了。

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's second quarter 2023 financial results. I am joined by Karla Lewis, President and Chief Executive Officer; Steve Koch, Executive Vice President and Chief Operating Officer; and Arthur Ajemyan, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the Investors section of our website at investor.rsac.com.

謝謝你，接線員。早上好，感謝大家參加我們的電話會議，討論 Reliance 的 2023 年第二季度財務業績。總裁兼首席執行官卡拉·劉易斯 (Karla Lewis) 也加入了我的行列； Steve Koch，執行副總裁兼首席運營官；以及高級副總裁兼首席財務官 Arthur Ajemyan。本次電話會議的錄音將發佈在我們網站 Investor.rsac.com 的投資者部分。

Please read the forward-looking statement disclosures included in our earnings release issued this morning and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are included in the non-GAAP reconciliation part of our earnings release. I will now turn the call over to Karla Lewis, President and CEO of Reliance.

請閱讀我們今天上午發布的收益報告中包含的前瞻性聲明披露內容，並註意它適用於本次電話會議期間發表的所有聲明。調整後數字的調節包含在我們收益發布的非公認會計準則調節部分中。我現在將把電話轉給 Reliance 總裁兼首席執行官卡拉·劉易斯 (Karla Lewis)。

Good morning, everyone, and thank you for joining us today to discuss our second quarter 2023 financial results. Reliance's business model is designed to provide resilient performance throughout economic cycles, including both pricing and end market demand fluctuations present in the metals industry. The unique facets of our business model, highlighted by diversification, small order sizes, quick delivery and increased value-added processing, combined with strong execution by our full Reliance team, support our ability to deliver consistent, profitable results.

大家早上好，感謝您今天加入我們討論我們 2023 年第二季度的財務業績。 Reliance 的業務模式旨在在整個經濟周期中提供彈性業績，包括金屬行業中存在的定價和終端市場需求波動。我們業務模式的獨特之處在於多元化、小訂單規模、快速交貨和增加增值處理，再加上我們整個 Reliance 團隊的強大執行力，支持我們提供一致、盈利結果的能力。

Overall activity at Reliance has remained healthy, as evidenced by solid volume growth year-over-year. We are excited by the continued onshoring and infrastructure spend activities that are creating new opportunities for us.

Reliance 的整體活動保持健康，銷量逐年穩健增長就證明了這一點。我們對持續的外包和基礎設施支出活動感到興奮，這些活動為我們創造了新的機會。

Turning to our results. Our second quarter net sales of $3.88 billion declined by 2.1% from the first quarter of 2023, with our tons sold down slightly more than anticipated and relatively flat selling prices that remain elevated by historical standards. Overall, customer activity in most of the end markets we serve remained healthy, with solid underlying demand and customer activity levels driven in part by our investments in organic growth.

轉向我們的結果。我們第二季度的淨銷售額為 38.8 億美元，較 2023 年第一季度下降 2.1%，銷量略高於預期，且售價相對持平，但按歷史標準衡量仍處於較高水平。總體而言，我們服務的大多數終端市場的客戶活動保持健康，強勁的潛在需求和客戶活動水平在一定程度上是由我們對有機增長的投資推動的。

We continue to focus on growing the business organically and through acquisitions while maintaining our pricing and margin discipline. As a result, we delivered diluted earnings per share of $6.49, which was within our expected range. Our strong profitability, along with effective working capital management, produced significant operating cash flow of $295.1 million in the second quarter.

我們繼續專注於通過收購有機發展業務，同時保持我們的定價和利潤紀律。結果，我們的攤薄每股收益為 6.49 美元，在我們的預期範圍內。我們強勁的盈利能力以及有效的營運資金管理，在第二季度產生了 2.951 億美元的大量運營現金流。

Investing for growth remains our top capital allocation priority, with approximately $154.3 million invested in both capital expenditures and M&A in the second quarter. We increased our capital expenditure budget for the full year 2023 from $500 million to a record $520 million, and approximately 2/3 of our CapEx budget is focused on growth projects, including investments in advanced value-added processing capabilities, facility upgrades to enhance safety and efficiencies, and expansion into new markets. Our expected total cash outlay for capital expenditures in 2023 is approximately $425 million to $475 million.

投資增長仍然是我們資本配置的首要任務，第二季度資本支出和併購投資約 1.543 億美元。我們將 2023 年全年的資本支出預算從 5 億美元增加到創紀錄的 5.2 億美元，大約 2/3 的資本支出預算集中在增長項目上，包括對先進增值處理能力的投資、用於增強安全性的設施升級和效率，以及拓展新市場。我們預計 2023 年資本支出現金支出總額約為 4.25 億至 4.75 億美元。

We completed the acquisition of Southern Steel Supply, LLC on May 1, increasing the total number of businesses we have acquired since our 1994 IPO to 72. Southern Steel is a highly regarded 60-plus-year-old metal service center in Memphis, Tennessee that expands our geographic reach in the Southern U.S. and extends our value-added processing services. Our M&A pipeline remains healthy, and we continue to evaluate various prospective opportunities. Our strong balance sheet, cash generation positions us well to pursue acquisitions that meet our disciplined criteria for high-quality growth.

我們於 5 月 1 日完成了對 Southern Steel Supply, LLC 的收購，使我們自 1994 年 IPO 以來收購的企業總數增加到 72 家。Southern Steel 是位於田納西州孟菲斯市一家擁有 60 多年曆史的備受推崇的金屬服務中心這擴大了我們在美國南部的地理覆蓋範圍，並擴展了我們的增值加工服務。我們的併購渠道保持健康，並且我們繼續評估各種潛在機會。我們強大的資產負債表和現金生成能力使我們能夠很好地進行符合我們高質量增長嚴格標準的收購。

Our cash flow also continues to fuel our strategy of returning capital to our stockholders. During the second quarter, we returned $132.5 million to our stockholders through dividends and share repurchases. Since 2018, we have invested nearly $2.2 billion in organic growth and acquisitions and returned $2.9 billion to our stockholders through dividends and share repurchases.

我們的現金流也繼續推動我們向股東返還資本的戰略。第二季度，我們通過股息和股票回購向股東返還 1.325 億美元。自 2018 年以來，我們已投資近 22 億美元用於有機增長和收購，並通過股息和股票回購向股東返還 29 億美元。

In summary, we are very pleased with the continued strong operating performance of our entire Reliance team to execute Reliance's consistent and resilient strategy on a day-to-day basis, operating safely and producing profitable results through all operating environments. Importantly, we remain in a position of strength to continue investing in and profitably growing our company, including new opportunities that include spending from the Infrastructure Bill, the CHIPS Act, the Inflation Reduction Act and onshoring activities. Thank you all for your time today. I'll now turn the call over to Steve, who will review our second quarter demand and pricing trends.

總之，我們對整個 Reliance 團隊持續強勁的運營表現感到非常滿意，他們每天執行 Reliance 一致且有彈性的戰略，在所有運營環境中安全運營並產生盈利結果。重要的是，我們仍然有能力繼續投資並實現公司的盈利增長，包括新的機會，包括基礎設施法案、CHIPS 法案、通貨膨脹減少法案和境內活動的支出。感謝大家今天抽出時間。我現在將把電話轉給史蒂夫，他將回顧我們第二季度的需求和定價趨勢。

Thanks, Karla, and good morning, everyone. I'd also like to thank the entire Reliance team for their outstanding individual and collective efforts and unwavering commitment to safety.

謝謝卡拉，大家早上好。我還要感謝整個 Reliance 團隊出色的個人和集體努力以及對安全的堅定承諾。

I'll now turn to our second quarter demand and pricing trends. Our tons sold decreased 2.4% compared to the first quarter of 2023, predominantly due to lower carbon flat-rolled shipments following the first quarter demand pull-forward impact from rising prices.

我現在將談談第二季度的需求和定價趨勢。與 2023 年第一季度相比，我們的銷量減少了 2.4%，這主要是由於第一季度價格上漲帶來的需求拉動影響後，碳扁材的出貨量減少。

Despite the sequential decline in volume, our Q2 tons sold were up 1.9% from the prior year and up 4.5% from 2022 on a year-to-date basis. This reflects solid underlying demand in key markets, including nonresidential construction, aerospace and certain general manufacturing sectors, along with contributions from our organic growth activities, enabling outperformance of broader service center shipment levels across the majority of our products.

儘管銷量環比下降，但我們第二季度的銷量較上年同期增長 1.9%，較年初至今增長 4.5%，較 2022 年增長 4.5%。這反映了包括非住宅建築、航空航天和某些一般製造行業在內的關鍵市場的強勁潛在需求，以及我們有機增長活動的貢獻，使我們的大多數產品能夠實現更廣泛的服務中心出貨水平的優異表現。

Our second quarter average selling price per ton sold of $2,626 was relatively flat compared to the first quarter of 2023 and in line with our expected range of flat to up 2%, as anticipated carbon flat rolled product price increases were offset by a downturn in stainless and aluminum commodity product prices.

與 2023 年第一季度相比，我們第二季度的每噸平均售價為 2,626 美元，相對持平，符合我們持平至上漲 2% 的預期範圍，因為預期的碳扁材價格上漲被不銹鋼的下滑所抵消和鋁商品價格。

I'll now turn to a high-level overview of the trends we saw within our products in key end markets. Our 3 largest product groups, carbon steel tubing, plate and structurals represented about 1/3 of our second quarter sales, and all of these products experienced stable or improved shipments compared to the first quarter of 2023 due to strength in the nonresidential construction market. We continue to believe new public infrastructure projects under the Infrastructure Bill and various other federal and state programs will provide continued support for nonresidential construction and infrastructure demand in the medium to long term.

現在，我將簡要概述我們在主要終端市場的產品中所看到的趨勢。我們的 3 個最大的產品組，碳鋼管材、板材和結構件，約占我們第二季度銷售額的 1/3，由於非住宅建築市場的強勁，所有這些產品的出貨量與 2023 年第一季度相比穩定或有所改善。我們仍然相信，基礎設施法案和其他各種聯邦和州計劃下的新公共基礎設施項目將為中長期非住宅建設和基礎設施需求提供持續支持。

Aluminum and stainless products also represented just over 30% of our total second quarter sales, with aluminum and stainless aerospace products comprising approximately 9%. Although common alloy aluminum and stainless shipments and pricing fell in the second quarter, aerospace product demand and pricing remained robust. We primarily service the automotive market through our toll processing operations, which, as a reminder, are not reflected in our accounts sold. Our tolling business in the second quarter of 2023 improved both year-over-year and sequentially on increased processing demand from the automotive market.

鋁和不銹鋼產品也占我們第二季度總銷售額的 30% 以上，其中鋁和不銹鋼航空航天產品約佔 9%。儘管普通合金鋁和不銹鋼的出貨量和定價在第二季度有所下降，但航空航天產品的需求和定價仍然強勁。我們主要通過來料加工業務為汽車市場提供服務，提醒一下，這並沒有反映在我們的銷售賬戶中。由於汽車市場加工需求的增加，我們的來料加工業務在 2023 年第二季度同比和環比均有所改善。

Within the general manufacturing market, we sell a diverse set of products to a diverse group of sectors. Shipments fell sequentially, partly due to the carbon flat-rolled demand pull-forward impacting the first quarter of 2023, but nevertheless, were up from the second quarter of 2022. While sales to the semiconductor industry declined both sequentially and year-over-year, our long-term outlook for this market remains positive as a result of the CHIPS Act and active reshoring. We continue to make investments to increase Reliance's capacity in the semiconductor space to support this anticipated growth.

在一般製造市場中，我們向不同的行業群體銷售多種產品。出貨量環比下降，部分原因是影響 2023 年第一季度的碳扁材需求拉動，但仍較 2022 年第二季度有所增長。儘管對半導體行業的銷售額環比和同比均下降，由於《CHIPS 法案》和積極的回流，我們對該市場的長期前景仍然樂觀。我們將繼續進行投資，以提高 Reliance 在半導體領域的產能，以支持這一預期增長。

Please refer to our earnings release for additional commentary on our end markets and product diversification. Overall, we expect that end market demand will remain healthy in the third quarter of 2023. I will now turn the call over to Arthur to review our financial results and outlook.

請參閱我們的收益發布，了解有關我們的終端市場和產品多元化的更多評論。總體而言，我們預計 2023 年第三季度終端市場需求將保持健康。我現在將電話轉給 Arthur，以審查我們的財務業績和前景。

Thanks, Steve, and good morning, everyone. Our sales of $3.88 billion in the second quarter declined by a modest 2.1% from the first quarter on relatively flat pricing. While carbon flat-rolled products drove the vast majority of the quarterly volume decline, their impact on sales dollars is relatively neutral, as higher selling prices for carbon flat-rolled products offset the impact of volume declines on our revenues. Declines in stainless and common alloy aluminum product sales in the second quarter drove the 2.1% sequential decline in revenues.

謝謝史蒂夫，大家早上好。由於定價相對平穩，我們第二季度的銷售額為 38.8 億美元，較第一季度小幅下降 2.1%。雖然碳壓延產品是季度銷量下降的主要原因，但其對銷售額的影響相對中性，因為碳壓延產品較高的銷售價格抵消了銷量下降對我們收入的影響。第二季度不銹鋼和普通合金鋁產品銷量的下降導致收入環比下降 2.1%。

Our FIFO gross profit margin, which excludes the effects of our LIFO inventory valuation method, remained relatively flat at 30.3% in the second quarter compared to 30.5% in the first quarter. However, the entry point into the second quarter was higher than the exit point due to temporary pressure on margins from declining stainless and aluminum product selling prices. The higher-than-anticipated decline in nonferrous product prices contributed to a revision of our annual LIFO estimate from $60 million of income to $120 million of income. As a result, we recorded LIFO income of $45 million in the second quarter to reflect a revised annual estimate.

我們的先進先出毛利率（不包括後進先出庫存估值法的影響）與第一季度的 30.5% 相比，第二季度保持相對平穩，為 30.3%。然而，由於不銹鋼和鋁產品銷售價格下降對利潤率造成暫時壓力，第二季度的進入點高於退出點。有色金屬產品價格降幅超出預期，導致我們將年度 LIFO 收入預測從 6,000 萬美元修改為 1.2 億美元。因此，我們在第二季度記錄了 4500 萬美元的 LIFO 收入，以反映修訂後的年度估計。

Our first quarter 2023 results included LIFO income of $15 million, bringing our 6-month total to $60 million of income or half of our current $120 million annual LIFO income estimate. Our reported gross profit margins, which are on a LIFO basis, came in at 31.5% for the second quarter, up from 30.9% in the first quarter.

我們 2023 年第一季度的業績包括 1500 萬美元的 LIFO 收入，使我們 6 個月的收入總額達到 6000 萬美元，或者是我們當前 1.2 億美元的年度 LIFO 收入估計的一半。我們報告的毛利率（按後進先出法計算）第二季度為 31.5%，高於第一季度的 30.9%。

As of June 30, 2023, the $683.8 million LIFO reserve on our balance sheet remains available to mitigate the impact of possible further declines in metal prices and benefit future period operating results.

截至 2023 年 6 月 30 日，我們資產負債表上的 6.838 億美元後進先出儲備金仍然可用，以減輕金屬價格可能進一步下跌的影響，並有利於未來期間的經營業績。

Moving on to expenses. Our second quarter same-store non-GAAP SG&A expenses modestly declined by $6.7 million or 1% compared to the first quarter from lower variable costs associated with lower tons shipped. On a year-over-year basis, our expenses were relatively consistent as incremental variable costs associated with higher tons shipped and inflationary wage adjustments were mostly offset by lower incentive-based compensation resulting from lower FIFO profitability.

繼續討論支出。與第一季度相比，我們第二季度同店非 GAAP SG&A 費用小幅下降了 670 萬美元，即 1%，原因是運輸噸數減少導致可變成本下降。與去年同期相比，我們的費用相對穩定，因為與較高噸位運輸和通貨膨脹工資調整相關的增量可變成本大部分被先進先出盈利能力較低導致的基於激勵的薪酬較低所抵消。

Overall, our second quarter pretax income of $510.9 million and pretax income margin of 13.2% were consistent with our first quarter results, and our diluted earnings per share of $6.49 for the second quarter were in line with our guidance of $6.40 to $6.60 per share.

總體而言，我們第二季度的稅前收入為 5.109 億美元，稅前利潤率為 13.2%，與第一季度的業績一致，第二季度稀釋後每股收益為 6.49 美元，與我們每股 6.40 美元至 6.60 美元的指導一致。

Turning to our balance sheet and cash flow. We generated cash flow from operations of $295.1 million, down from $384.6 million for the first quarter, mainly due to timing of estimated income tax payment. For the 6-month period ended June 30, 2023, our operating cash flow of $679.7 million was consistent with the same 6-month period in 2022, as the impact of lower profitability was offset by lower working capital investments in 2023.

轉向我們的資產負債表和現金流。我們的運營現金流為 2.951 億美元，低於第一季度的 3.846 億美元，這主要是由於預計繳納所得稅的時間安排所致。截至 2023 年 6 月 30 日的 6 個月期間，我們的運營現金流為 6.797 億美元，與 2022 年同期的 6 個月持平，因為盈利能力下降的影響被 2023 年營運資本投資的減少所抵消。

Our inventory churn rate based on tons improved to 4.8x or 2.5 months on hand in 2023 compared to 4.4x in the same 6-month period in 2022. Overall, operating cash flow generation remains strong, and our working capital management metrics are at healthy levels.

與 2022 年同期 6 個月期間的 4.4 倍相比，我們的庫存周轉率（以噸為單位）在 2023 年改善至 4.8 倍或 2.5 個月。總體而言，運營現金流生成依然強勁，我們的營運資本管理指標也處於健康狀態水平。

Our operating cash flow for the 6-month period in 2023 and cash on hand funded $257.2 million of growth initiatives in the form of capital expenditures and acquisitions, the return of $233.4 million to our stockholders in the form of $120.6 million of cash dividends and $112.8 million of share repurchases, and the repayment of $500 million of senior notes. Approximately $568 million remained available on our $1 billion share repurchase authorization as of June 30, 2023.

我們 2023 年 6 個月期間的運營現金流和手頭現金以資本支出和收購的形式為增長計劃提供了 2.572 億美元的資金，以 1.206 億美元的現金股息和 112.8 美元的形式向股東返還了 2.334 億美元。回購 5 億美元的股票，並償還 5 億美元的優先票據。截至 2023 年 6 月 30 日，我們仍可獲得約 5.68 億美元的 10 億美元股票回購授權。

I'll now turn to our third quarter outlook. While we anticipate underlying demand will remain healthy in the third quarter of 2023, we expect our tons sold will be down 2% to 4% compared to the second quarter due to normal seasonal patterns, including a decline in shipping volumes resulting from planned customer shutdowns and vacation schedules, along with one less shipping day. However, compared to the third quarter of 2022, this guidance implies growth in tons sold of 1.5% to 3.5%. In addition, we expect our average selling price per ton sold for the third quarter to be down 2% to 4% compared to the second quarter, primarily driven by declining prices for flat-rolled products across our major commodities, along with carbon steel tubing products, which selectively represent about 35% of our sales. We also anticipate temporary downward pressure on our gross profit margin from these declining price trends.

現在我將談談我們的第三季度展望。雖然我們預計 2023 年第三季度的基本需求將保持健康，但由於正常的季節性模式，包括計劃中的客戶停工導致的運輸量下降，我們預計我們的銷量將比第二季度下降 2% 至 4%和假期安排，以及減少一個發貨日。然而，與 2022 年第三季度相比，這一指導意味著銷量增長 1.5% 至 3.5%。此外，我們預計第三季度每噸平均售價將比第二季度下降 2% 至 4%，這主要是由於我們主要商品的扁材產品價格下降以及碳鋼管材價格下降所致產品，選擇性地占我們銷售額的 35% 左右。我們還預計價格下降趨勢將給我們的毛利率帶來暫時的下行壓力。

Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $4.90 to $5.10 for the third quarter of 2023. Thank you, and we'll now open the call up to questions. Operator?

根據這些預期，我們預計 2023 年第三季度的非 GAAP 攤薄每股收益將在 4.90 美元至 5.10 美元之間。謝謝，我們現在將開始電話提問。操作員？

(Operator Instructions) Our first question comes from the line of Katja Jancic with BMO Capital Markets.

（操作員說明）我們的第一個問題來自 BMO 資本市場的 Katja Jancic。

Karla, in your prepared remarks, I think you mentioned that some of your growth CapEx is dedicated to expanding into new markets. Can you elaborate on that, please?

卡拉，在您準備好的發言中，我想您提到您的一些增長資本支出致力於拓展新市場。您能詳細說明一下嗎？

Yes. Katya, so Reliance, I think we've talked about many times before where we've been very active in growing our businesses across our whole portfolio of companies. So a lot of times, we're adding processing capabilities or expanding existing locations. Part of the growth in new markets, that can be a new geographic market, it can be, like I said, adding processing equipment, et cetera.

是的。 Katya，Reliance，我想我們之前已經討論過很多次了，我們一直非常積極地在整個公司投資組合中發展我們的業務。所以很多時候，我們都會增加處理能力或擴大現有地點。新市場增長的一部分，可以是新的地理市場，就像我說的，可以是增加加工設備等等。

A couple of things we have going on in particular when we talked about this fourth quarter is we're currently experiencing the ramp-up of our flat-rolled operations that we have put on campus with some of the mills as they ramp. We're seeing some good growth there. We had acquired some facilities in the Michigan area for a lot of our toll processing companies a few years ago. But now we're in the process of installing some new lines in there. So in addition to their storage services, they'll be generating revenue off of their processing capabilities there like they do in their other locations. Geographically, we've opened up a small facility in Iowa recently, where we've got some expansions going on. In the Atlanta area, Houston area, we expanded some facilities.

當我們談論第四季度時，我們特別關注的幾件事是，我們目前正在經歷平軋業務的增長，我們已經將這些業務與一些工廠一起放在園區內。我們在那裡看到了一些良好的增長。幾年前，我們在密歇根地區為我們的許多來料加工公司收購了一些設施。但現在我們正在那里安裝一些新線路。因此，除了存儲服務之外，他們還可以像在其他地點一樣利用處理能力來創收。從地理位置上看，我們最近在愛荷華州開設了一家小型工廠，並正在進行一些擴建。在亞特蘭大地區、休斯頓地區，我們擴建了一些設施。

So there's a little going on everywhere. One of our bigger CapEx projects currently in the works that we've talked about before is our one company that focuses on the semiconductor industry. And with all of the build going on to expand capacity in the U.S, we are building a new facility in Texas so that company can support the many different new chip manufacturing facilities being constructed in the U.S. So we've got a very specialty type company participating in that. But we also have some of our more nonresidential construction-type businesses that are benefiting from the more foundational traditional build of those facilities. So a lot of different activity going on throughout the company.

所以到處都發生了一些事情。我們之前討論過的目前正在進行的較大資本支出項目之一是我們一家專注於半導體行業的公司。隨著美國產能擴張的不斷進行，我們正在德克薩斯州建設一座新工廠，以便公司能夠支持在美國建造的許多不同的新芯片製造工廠。因此，我們擁有一家非常專業的公司參與其中。但我們也有一些非住宅建築類型的企業，它們受益於這些設施的更基礎的傳統建築。因此整個公司正在進行很多不同的活動。

And can you just remind us, when is the semiconductor facility expected to be completed?

您能否提醒我們，半導體工廠預計何時竣工？

So we actually have 2 new facilities going up in Texas. The smaller of the 2 is operational now. And it's early. It's just ramping up. The larger facility should be operational Q2 of 2024. That's currently in the build phase.

所以我們實際上在德克薩斯州建立了兩個新工廠。兩個中較小的一個現已投入運行。而且時間還早。它只是在加速。更大的設施將於 2024 年第二季度投入運營。目前正處於建設階段。

Okay. And maybe just last one. On the M&A, you have a very strong balance sheet. Can you talk about what -- how the pipeline looks like right now? And what size deals you're seeing potentially?

好的。也許只是最後一個。在併購方面，您擁有非常強大的資產負債表。您能談談現在的管道是什麼樣子嗎？您可能會看到多大規模的交易？

Yes. So we -- yes, sure, Katja, the -- we do continue -- for the last couple years it's been a pretty set, steady stream of opportunities. So we have a lot of different teasers and opportunities to look at. There are -- I mean we really focus on what opportunity is in front of us and do we think that meets our criteria and really fits within the Reliance family. What we buy, many different sized companies. We still will buy smaller companies, although certainly we would rather put our efforts behind some larger efforts that would contribute more to the company, and there are some larger opportunities out there, but we generally wait for the sellers to be ready. It's friendly acquisitions. It's when they're making a decision to exit the business, typically. We do maintain relationships so that we have an opportunity to see those opportunities. We think we're in a good position for that.

是的。所以我們——是的，當然，Katja，我們確實繼續——在過去的幾年裡，這是一個相當穩定的機會流。所以我們有很多不同的預告片和機會可以看。我的意思是，我們真正關注的是擺在我們面前的機會，以及我們認為它是否符合我們的標準並且真正適合 Reliance 大家庭。我們購買的，有很多不同規模的公司。我們仍然會購買較小的公司，儘管我們當然寧願把我們的努力放在一些更大的努力上，這些努力將為公司做出更多貢獻，並且那裡有一些更大的機會，但我們通常會等待賣家做好準備。這是友好收購。通常是在他們決定退出業務的時候。我們確實維持關係，以便我們有機會看到這些機會。我們認為我們在這方面處於有利地位。

We've seen a lot of smaller, more fabrication type opportunities. On the teasers, we've seen some smaller service centers. But over the last year to 1.5 years, we've seen some more medium-sized to larger, more traditional type service center companies.

我們已經看到了很多更小、更多製造類型的機會。在預告片中，我們看到了一些較小的服務中心。但在過去的一年到1.5年裡，我們看到了一些中型到大型、更傳統類型的服務中心公司。

As we talked about on prior calls, for a period of time, there was a disconnect, people trying to sell off the peak. And so there were some value differences, but we're seeing that start to come more in line. So we're still excited about the opportunities that are out there. And I think at the same time, we haven't been quite as active on completing acquisitions, although we're still evaluating quite a few. We've also stepped up from historical standards our organic growth, so I think we're kind of hitting it and supplementing growth on a little more balanced approach currently.

正如我們在之前的電話會議中談到的那樣，在一段時間內，人們試圖在高峰期拋售。因此存在一些價值差異，但我們看到這種差異開始變得更加一致。因此，我們仍然對現有的機會感到興奮。我認為與此同時，我們在完成收購方面還沒有那麼積極，儘管我們仍在評估相當多的收購。我們的有機增長也比歷史標準有所提高，所以我認為我們目前正在以更加平衡的方式實現增長並補充增長。

Our next question comes from the line of Phil Gibbs with KeyBanc.

我們的下一個問題來自 Phil Gibbs 與 KeyBanc 的對話。

Just regarding some of the public and federal infrastructure projects that are likely to hit the books later this year in '24, '25. Do you have any visibility to those projects happening within some of the things that you're working on? And when you fabricate certain things for beams and plate and maybe even tubular, do you know what specific projects it's going into? Just curious if you have that level of visibility. Anything that you could share would be helpful.

僅就一些公共和聯邦基礎設施項目而言，這些項目可能會在今年晚些時候的“24”、“25”中上市。您對您正在從事的某些事情中發生的項目有任何了解嗎？當您為梁、板甚至管材製造某些東西時，您知道它要用於哪些具體項目嗎？只是好奇你是否有那樣的可見度。您可以分享的任何內容都會有所幫助。

Phil, so I would say at a high level, kind of from a corporate view, we don't have a significant amount of visibility. But certainly, our companies out in the field who are servicing their customers on these projects, they have a much better feel. And as we've talked about in the past, Reliance, we're not usually the largest -- on the largest projects with the largest tons, but we're involved in a lot of projects, some as the primary and then some as kind of fill in and certain products and processing services. So our folks in the field generally know where the product is going, but it's really hard for us to keep track of it. And part of the beauty when we talk to our people in the field is we're involved in so many different types of projects, it's really hard to kind of roll it up to something to talk about. But I think Steve can give you a little more visibility on that.

菲爾，所以我想說，從企業的角度來看，我們沒有很高的知名度。但當然，我們在現場為客戶提供這些項目服務的公司，他們的感覺要好得多。正如我們過去談到的，Reliance，我們通常不是最大的——在最大噸位的最大項目上，但我們參與了很多項目，有些是主要項目，有些是次要項目。種類填寫以及某些產品和加工服務。因此，我們的現場人員通常知道產品的去向，但我們很難跟踪它。當我們與該領域的員工交談時，其中的美妙之處在於我們參與瞭如此多不同類型的項目，很難將其總結為可討論的內容。但我認為史蒂夫可以讓你更清楚地了解這一點。

Yes. Just when we did a channel check with a lot of our companies that service the non-res and infrastructure throughout the United States, there's seeing a lot of activity in the bridge space, rail, ports, a lot of airport projects going on. And an ongoing project has been the onshore infrastructure to support the planned offshore farms that are going up and down the East Coast.

是的。就在我們對許多為美國各地的非資源和基礎設施提供服務的公司進行渠道檢查時，我們發現橋樑空間、鐵路、港口和機場項目正在進行大量活動。一個正在進行的項目是陸上基礎設施，以支持計劃中的東海岸海上農場。

And then as it relates to M&A, I know you recently got back into the market in the second quarter with Southern Steel. But if I kind of look ahead the next, call it, 2, 3, 4 quarters, you could find yourself in a net cash position even with the CapEx that you're spending pretty aggressively in the back half and maybe into next year. So is there any thought to doing more larger-scale acquisitions? Or do you feel like your internal pipeline is kind of robust enough to cover some of the higher RR projects you're looking at right now?

然後，就併購而言，我知道您最近在第二季度與南方鋼鐵公司重返市場。但如果我展望下一個季度，即 2、3、4 個季度，您可能會發現自己處於淨現金狀況，即使您在下半年甚至明年的資本支出相當大。那麼有沒有想過進行更大規模的收購？或者您是否覺得您的內部渠道足夠強大，可以覆蓋您現在正在考慮的一些更高的 RR 項目？

Yes. So we're always ready to do larger scale acquisitions if it's the right company and we can make it work. So that hasn't changed, as I mentioned earlier. I mean we look at opportunities of all sizes. It just depends what's actionable at the time. So that appetite has not changed even before we were in the cash position -- had cash on our balance sheet as we do right now. So we are continuing to actively consider and look at any of those opportunities we see. And certainly, if we find the right company, we would love to execute on that.

是的。因此，如果是合適的公司並且我們能夠使其發揮作用，我們隨時準備進行更大規模的收購。正如我之前提到的，這一點沒有改變。我的意思是我們會關注各種規模的機會。這僅取決於當時可以採取哪些行動。因此，即使在我們處於現金狀況之前，這種偏好也沒有改變——就像我們現在一樣，我們的資產負債表上有現金。因此，我們將繼續積極考慮和尋找我們看到的任何機會。當然，如果我們找到合適的公司，我們很樂意執行。

At the same time, we have always been a growth company. As I mentioned earlier, we're a little more aggressive on the organic growth side for the last several years. We also, I think, have been a little more active on a more consistent basis on shareholder return activities. So we expect to continue to deploy our capital wisely in all those areas. And at the same time, we don't think it's the worst thing in the world to have a strong balance sheet and be prepared for whatever may come.

同時，我們一直是一家成長型公司。正如我之前提到的，過去幾年我們在有機增長方面更加積極。我認為，我們在股東回報活動方面也更加積極、更加一致。因此，我們希望繼續在所有這些領域明智地部署我們的資本。與此同時，我們認為擁有強大的資產負債表並為可能發生的情況做好準備並不是世界上最糟糕的事情。

Our next question comes from the line of Martin Englert with Seaport Research Partners.

我們的下一個問題來自 Martin Englert 和 Seaport Research Partners 的電話。

Looking beyond the construction of facilities related to onshoring, what are the customers discussing with you regarding their future metals needs once these facilities are ramped in future years here, if you're having any discussions around that just yet?

除了與在岸相關的設施建設之外，一旦這些設施在未來幾年在這裡擴建，客戶會與您討論他們未來的金屬需求嗎？如果您正在就此進行任何討論的話？

Yes. Martin, I don't know that we're -- certainly, I think some of our companies who are very focused on certain of those industries and end markets, if you take semiconductor chips, for instance, our people running our businesses selling into those markets are very engaged with their customers there, talking about both the build, but then future capacity.

是的。馬丁，我不知道我們——當然，我認為我們的一些公司非常專注於某些行業和終端市場，例如，如果你以半導體芯片為例，我們的員工經營我們的業務，將產品銷售給這些市場與客戶的互動非常頻繁，不僅討論了建設，還討論了未來的產能。

I think again, we serve so many different markets. There are discussions. I think for us, the fact that different mills are ramping up, domestic mills are ramping up capacity, will allow us to better serve the increased volumes that our customers will need in the future. And that's our spot in the supply chain. We continue to have customers asking us to do more for them on a value-added processing standpoint and really partnering with our customers.

我再次想，我們服務於許多不同的市場。有討論。我認為對我們來說，不同工廠正在增加產能，國內工廠正在增加產能，這將使我們能夠更好地滿足客戶未來所需的增加產量。這就是我們在供應鏈中的位置。我們不斷有客戶要求我們從增值加工的角度為他們做更多的事情，並真正與客戶合作。

So there are many different discussions going on. But again, our business, while we and our customers do look at the long term, we're really servicing on a day-to-day basis. And I think we've done a good job of being a leader in investing in increased capabilities for our customers, and that's something that we'll incrementally continue to do to support that future increased demand.

因此，有許多不同的討論正在進行。但再說一次，我們的業務，雖然我們和我們的客戶確實著眼於長期，但我們實際上是在日常服務。我認為我們在投資增強客戶能力方面做得很好，成為了領導者，我們將繼續逐步這樣做，以支持未來不斷增長的需求。

Appreciate it. And I believe you called out common alloy sheet as a point of weakness in the press release. Is there any color that you could offer there to what's happening in the market?

欣賞它。我相信您在新聞稿中指出了普通合金板的一個弱點。您可以為市場上正在發生的事情提供任何顏色嗎？

Well, I think from a common alloy standpoint, I think our comments were kind of focused on just some pricing erosion that you've seen. That product follows the LME a bit, and we've just seen a little downward pricing pressure on those products.

好吧，我認為從普通合金的角度來看，我認為我們的評​​論主要集中在您所看到的一些價格侵蝕上。該產品稍微跟隨倫敦金屬交易所 (LME) 的走勢，我們剛剛看到這些產品的定價略有下降。

And ample supply in the supply chain.

並且供應鏈上貨源充足。

Okay. So really, from a price perspective, it's more of a function of the surcharge as opposed to like a base price erosion or something along those lines, yes?

好的。所以實際上，從價格的角度來看，它更多的是附加費的函數，而不是基本價格侵蝕或類似的東西，是嗎？

Yes.

是的。

Our next question comes from the line of Alex Hacking with Citi.

我們的下一個問題來自花旗銀行的 Alex Hacking。

Yes. So I guess the first question, I'm not sure if you've disclosed this, but how many tons are you co-locating at the new mill in Texas?

是的。所以我想第一個問題是，我不確定您是否披露了這一點，但您在德克薩斯州的新工廠有多少噸？

Alex, we -- you are correct. We have not disclosed that. Yes. And we -- at both of those operations, we're supporting our customers, but also partnering with the mills in doing both toll processing on some of the volume as they request and then also direct sales of the metal. So we're ramping as the mills ramp and it's nothing specific committed, but we certainly will benefit. As the mills continue to ramp and produce more tons, we certainly expect our volumes there to grow with them.

亞歷克斯，我們——你是對的。我們還沒有透露這一點。是的。在這兩項業務中，我們不僅為客戶提供支持，還與鋼廠合作，根據他們的要求對部分數量進行委託加工，然後直接銷售金屬。因此，隨著工廠的發展，我們也在不斷發展，雖然沒有什麼具體承諾，但我們肯定會受益。隨著工廠繼續擴大產能並生產更多噸的產品，我們當然預計我們的產量也會隨之增長。

Okay. And then just following up on that. Are you -- I mean are you specifically targeting Mexico as an end market there as the mills are? And I know the mills have commented that Mexico has been very strong recently, right, with AHMSA being out. I don't know if that kind of flows into what you are doing or not?

好的。然後繼續跟進。你們是——我的意思是，你們是否像工廠一樣專門瞄準墨西哥作為終端市場？我知道鋼廠評論說墨西哥最近非常強勁，對吧，AHMSA 出局了。我不知道你現在所做的事情是否也有這種感覺？

Yes. So we try to sell metal to people wherever they are if they want metal. So if there is more demand for metal in Mexico, we certainly want to service those markets. We acquired a company back in 2008 that had some very strong toll processing capabilities, 3 locations in Mexico. We've added a fourth and expanded all of those over the years. We're in process of doing further expansions down there because we see growth in that market.

是的。因此，如果人們想要金屬，我們會嘗試向他們出售金屬，無論他們身在何處。因此，如果墨西哥對金屬的需求增加，我們當然希望為這些市場提供服務。我們早在 2008 年就收購了一家公司，該公司擁有非常強大的來料加工能力，在墨西哥設有 3 個地點。多年來，我們增加了第四個並擴展了所有這些。我們正在那裡進行進一步擴張，因為我們看到該市場的增長。

We also have some of our U.S. companies selling more metal down into Mexico. One of our on-campus opportunities, I think that mill has directed more metal there. So in support of them, we're pushing some more tons down there, and we continue to look at opportunities to meet our customers' needs, both existing and new customers, as we see opportunities grow down there. So certainly, we look at it as a potential favorable market for growth right now.

我們還有一些美國公司向墨西哥銷售更多金屬。我們的校園機會之一，我認為工廠在那裡生產了更多的金屬。因此，為了支持他們，我們正在向那裡投入更多的資源，並且隨著我們看到那裡的機會不斷增長，我們將繼續尋找機會來滿足客戶的需求，無論是現有客戶還是新客戶。當然，我們目前將其視為一個潛在的有利增長市場。

Okay. And then just one final one, if I may. I think you previously have mentioned skilled labor shortage is a challenge. Both you and your customers and a lot of companies continue to report that. Obviously, it's a lot less acute or it's less acute now than it was. Could you maybe discuss, are you being constrained by lack of skilled labor or it's manageable now?

好的。如果可以的話，然後是最後一篇。我想您之前已經提到熟練勞動力短缺是一個挑戰。您和您的客戶以及許多公司都在繼續報告這一情況。顯然，現在的情況沒有以前那麼嚴重了。您能否討論一下，您是否受到缺乏熟練勞動力的限制，或者現在可以管理？

Yes. So I think you're right, it's not as acute at most of our operations now, Alex. I think we've been more successful in probably having more people available. I think where we've done a really good job is retaining our existing employees. We appreciate those employees being with us. Some of them have had to work a little harder, a little longer hours than maybe they had historically because of some of those issues.

是的。所以我認為你是對的，現在我們的大多數行動都沒有那麼嚴重，亞歷克斯。我認為我們在吸引更多人員方面取得了更大的成功。我認為我們做得非常好的地方是留住現有員工。我們感謝那些與我們在一起的員工。由於其中一些問題，他們中的一些人不得不比以往更加努力地工作，工作時間更長一些。

We've also, I think, had to -- I think with newer employees, most people are seeing higher turnover levels. So more of an investment in training, especially from a safety perspective, so a little more effort being put there. But there are still some constraints, I think for us, but we've seen more at certain of our customers, which does impact some of the shipment flow, and end demand is still there, but how fast can you fill that.

我認為，我們還必須——我認為對於新員工來說，大多數人都會看到更高的流動率。因此，需要對培訓進行更多投資，特別是從安全角度來看，因此需要付出更多努力。但我認為對我們來說仍然存在一些限制，但我們在某些​​客戶身上看到了更多限制，這確實影響了一些發貨流程，最終需求仍然存在，但你能多快滿足這一需求。

So I think still a factor, not as much as it was, but that also has been an opportunity for Reliance, where as our customers may struggle with being able to get the skilled labor, they're asking us to support them more, which has given us the opportunity to do more value-added processing for them. And we try to kind of spoil them, service them well so that we make it easy for them and they want to continue to retain that business with us. And we've certainly seen success in that area over the past few years.

因此，我認為這仍然是一個因素，雖然不像以前那麼重要，但這對 Reliance 來說也是一個機會，因為我們的客戶可能很難獲得熟練勞動力，所以他們要求我們為他們提供更多支持，這讓我們有機會為他們做更多的增值加工。我們試圖寵壞他們，為他們提供良好的服務，以便我們為他們提供便利，並且他們希望繼續與我們保持業務關係。在過去的幾年裡，我們確實看到了該領域的成功。

There are no further questions in queue. I'd like to hand the call back to management for closing remarks.

隊列中沒有其他問題。我想將電話轉交給管理層以供結束語。

Thank you. And thanks again to all of you for your time and attention joining our call today and for your continued support of Reliance, and we look forward to speaking with you again on our third quarter call in October. Thank you.

謝謝。再次感謝大家今天抽出時間和關注參加我們的電話會議，以及對 Reliance 的持續支持，我們期待在 10 月份的第三季度電話會議上再次與您交談。謝謝。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。