Reliance Inc (RS) 2023 Q3 法說會逐字稿

Greetings, and welcome to the Reliance Steel & Aluminum Co. Third Quarter 2023 Earnings Call.

您好，歡迎參加 Reliance Steel & Aluminium Co. 2023 年第三季財報電話會議。

(Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Kim Orlando with Addo Investor Relations. Thank you, Kim. You may begin.

（操作員指示）謹此提醒，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，金。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 Third 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，接線生。早安，感謝大家參加我們的電話會議，討論 Reliance 的 2023 年第三季財務業績。總裁兼執行長卡拉·劉易斯 (Karla Lewis) 也加入了我的行列； Steve Koch，執行副總裁兼營運長；以及資深副總裁兼財務長 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.

請閱讀我們今天早上發布的收益報告中包含的前瞻性聲明披露內容，並注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。我現在將把電話轉給 Reliance 總裁兼執行長 Karla Lewis。

Good morning, everyone, and thank you for joining us today to discuss our third quarter 2023 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.

大家早安，感謝您今天加入我們討論我們的 2023 年第三季業績。 Reliance 的業務模式旨在在整個經濟週期中提供彈性業績，包括金屬產業中存在的定價和終端市場需求波動。

The unique facets of our business model highlighted by strong pricing and inventory management discipline, a highly diversified product mix that is sold into various end markets and geographies, small order sizes, quick delivery value-added processing and increasing collaboration across our family of companies collectively support our ability to deliver consistent profitable results and generate cash flow. I'd like to commend the entire Reliance team for successfully executing our strategy during challenging times and delivering another quarter of solid financial performance.

我們業務模式的獨特之處在於強大的定價和庫存管理紀律、銷往不同終端市場和地區的高度多元化的產品組合、小訂單規模、快速交付增值處理以及加強我們各公司之間的協作支持我們提供持續獲利結果和產生現金流的能力。我要讚揚整個 Reliance 團隊在充滿挑戰的時期成功執行我們的策略，並在另一個季度實現了穩健的財務表現。

Our overall financial performance in the third quarter was in line with our expectations. While our tons sold were down slightly more than anticipated, we outperformed broader service center industry trends and delivered year-over-year growth. As expected, our average selling price declined throughout the quarter across virtually all of our major commodity products, but our pricing discipline and industry-leading value-added processing capabilities provided us with gross margin stability and lessen the impact of falling prices on our gross profit margin.

我們第三季的整體財務表現符合我們的預期。雖然我們的銷售下降幅度略高於預期，但我們的表現優於更廣泛的服務中心行業趨勢，並實現了同比增長。正如預期的那樣，我們幾乎所有主要商品產品的平均售價在整個季度都有所下降，但我們的定價紀律和行業領先的增值處理能力為我們提供了毛利率穩定性，並減輕了價格下跌對毛利的影響利潤。

As a result, we delivered non-GAAP earnings per share of $5 in line with our guidance. Our profitability, coupled with effective working capital management, generated strong operating cash flow of $466 million for the quarter. Investing in growth remains our top capital allocation priority with approximately $125.5 million of capital expenditures. Our capital expenditure budget for the full year 2023 remains unchanged at a record $520 million, with approximately 2/3 directed towards growth projects to advance our value-added processing capabilities upgrade facilities and expand into new markets.

因此，我們實現了 5 美元的非 GAAP 每股收益，符合我們的指引。我們的獲利能力加上有效的營運資金管理，為本季產生了 4.66 億美元的強勁營運現金流。投資成長仍然是我們資本配置的首要任務，資本支出約為 1.255 億美元。我們 2023 年全年的資本支出預算保持在創紀錄的 5.2 億美元不變，其中約 2/3 用於成長項目，以推進我們的增值處理能力、升級設施並拓展新市場。

Our total 2023 CapEx cash outlay is expected to be in the range of $450 million to $475 million. While we did not complete any acquisitions during the third quarter, the pipeline remains robust. We will pursue opportunities that meet our disciplined criteria of well-managed companies that would be complementary to our diversification strategy and immediately accretive to earnings.

我們 2023 年的資本支出現金支出總額預計在 4.5 億至 4.75 億美元之間。雖然我們在第三季沒有完成任何收購，但管道仍然強勁。我們將尋求符合我們管理良好的公司嚴格標準的機會，這些機會將補充我們的多元化策略並立即增加收益。

Our acquisition strategy is supported by our strong balance sheet and consistent ability to generate cash throughout industry cycles. Along with growth, returning value to our stockholders remains a core element of our capital allocation strategy.

我們的收購策略得到了我們強大的資產負債表和在整個產業週期中持續產生現金的能力的支持。隨著成長，向股東回報價值仍是我們資本配置策略的核心要素。

During the third quarter, we returned $185.1 million to our stockholders through a combination of dividends and share repurchases and we continue to opportunistically repurchase shares in the fourth quarter. Since 2018, we have invested over $2.3 billion in organic growth and acquisitions and returned nearly $3.1 billion to our stockholders through dividends and share repurchases far surpassing our metal service center peers.

第三季度，我們透過股利和股票回購相結合的方式向股東返還了 1.851 億美元，我們在第四季度繼續擇機回購股票。自 2018 年以來，我們已在有機成長和收購方面投資超過 23 億美元，並透過股息和股票回購向股東返還近 31 億美元，遠遠超過金屬服務中心同行。

In summary, we are very pleased with and thankful for the ongoing efforts of our entire Reliance team. All of whom expertly execute Reliance's strategy on a day-to-day basis, operate safely and produce industry-leading results through all operating environments. We will continue to leverage our strong balance sheet and significant liquidity to fund profitable growth and return value to our stockholders. We are excited about the many growth activities underway and that we anticipate arising under the Infrastructure Bill, the CHIPS Act and the Inflation Reduction Act as well as on-shoring and near-shoring activities in the markets we serve.

總之，我們對整個 Reliance 團隊的持續努力感到非常滿意和感謝。所有這些人都在日常工作中熟練地執行 Reliance 的策略，在所有營運環境中安全地運作並產生領先業界的成果。我們將繼續利用我們強大的資產負債表和大量的流動性來為獲利成長提供資金並為股東回報價值。我們對正在進行的許多成長活動感到興奮，我們預計將根據《基礎設施法案》、《CHIPS 法案》和《通貨膨脹減少法案》以及我們服務的市場中的在岸和近岸活動開展這些活動。

Thank you all for your time today. I'll now turn the call over to Steve, who will review our third quarter demand and pricing trends.

感謝大家今天抽出時間。我現在將把電話轉給史蒂夫，他將回顧我們第三季的需求和定價趨勢。

Thanks, Karla, and good morning, everyone. I'd like to echo Karla's comments by thanking the Reliance team for delivering another quarter of profitable results and for the continued focus and effort to ensure the safety of our workforce. I'm pleased to report that the third quarter was our strongest safety quarter in all of 2023.

謝謝卡拉，大家早安。我想回應 Karla 的評論，感謝 Reliance 團隊再次實現了季度盈利，並持續關注和努力確保我們員工的安全。我很高興地報告，第三季是我們 2023 年全年安全表現最強勁的季度。

I will now turn to our third quarter demand and pricing trends. Our tons sold were up 1.1% from the third quarter of 2022 and are up 3.4% on a year-to-date basis, reflecting solid underlying demand in key markets, including non-res construction, aerospace as well as contributions from our organic growth activities.

我現在將談談第三季的需求和定價趨勢。我們的銷售量較 2022 年第三季成長 1.1%，較年初至今成長 3.4%，反映出關鍵市場（包括非再生能源建築、航空航太）強勁的潛在需求以及我們有機成長的貢獻活動。

Our year-to-date 3.4% increase in tons sold outpaces the 1% increase across the broader service center industry. When compared to the second quarter of 2023, our tons sold decreased 4.3% predominantly due to lower carbon flat-rolled shipments at a declining pricing environment led to more cautious customer buying activity, normal seasonality and one less shipping day. Our average selling price per ton sold of $2,552 was down 2.8% from the second quarter of 2023, but in line with our expected range of down 2% to 4%.

今年迄今為止，我們的銷量成長了 3.4%，超過了整個服務中心產業 1% 的增幅。與 2023 年第二季相比，我們的銷售量下降了 4.3%，主要是由於在定價環境下降的情況下低碳扁材發貨導致客戶購買活動更加謹慎、季節性正常以及運輸日減少。我們的每噸平均售價為 2,552 美元，較 2023 年第二季下降 2.8%，但符合我們下降 2% 至 4% 的預期範圍。

I will now turn to a high-level overview of the trends we saw within our products and key end markets. Carbon steel tubing, plate and structurals, our 3 largest product groups represented about 1/3 of our third quarter sales. All of these products experienced higher shipments compared to the third quarter of 2022 and stable or only slight declines in daily shipments compared to the second quarter of 2023. We continue to believe new public infrastructure projects under various federal state programs in addition to industrial reshoring efforts will continue to support non-res construction and infrastructure demand in the medium to long term.

現在，我將簡要概述我們在產品和關鍵終端市場中看到的趨勢。碳鋼管材、板材和結構件是我們最大的 3 個產品組，約占我們第三季銷售的 1/3。與2022 年第三季相比，所有這些產品的出貨量均有所增加，與2023 年第二季相比，每日出貨量穩定或僅略有下降。除了工業回流努力外，我們仍然相信各種聯邦州計劃下的新公共基礎設施項目中長期將繼續支持非資源建設和基礎設施需求。

Aluminum and stainless products represented 31% of our total third quarter sales with aluminum stainless aerospace products comprising approximately 9%. Although common alloy, aluminum and stainless shipments and pricing declined slightly in the third quarter, aerospace product demand and pricing remains strong with shipments up significantly year-over-year. We primarily service the automotive market through our toll processing operations, which as a reminder, are not reflected in our tons sold.

鋁和不銹鋼產品占我們第三季總銷售額的 31%，其中鋁不銹鋼航空航太產品約佔 9%。儘管第三季普通合金、鋁和不銹鋼的出貨量和定價略有下降，但航空航太產品的需求和定價仍然強勁，出貨量較去年同期大幅成長。我們主要透過來料加工業務為汽車市場提供服務，但需要提醒的是，這並沒有反映在我們的銷售中。

Our tolling business in the third quarter of 2023 was consistent with the second quarter at approximately 4% of our total sales, and improved year-over-year on increased processing demand from the automotive market. We did not experience a material impact resulting from the UAW strike during the third quarter. We saw a wide range of products diverse sectors of the general manufacturing market. Shipments declined both sequentially and year-over-year due in part to both seasonality and a pullback in carbon flat-rolled demand as prices decline.

我們在 2023 年第三季的來料加工業務與第二季持平，約佔總銷售額的 4%，並且由於汽車市場加工需求的增加而同比有所改善。第三季我們沒有受到 UAW 罷工的實質影響。我們看到了一般製造市場不同領域的廣泛產品。出貨量較上月及年比均下降，部分原因是季節性因素以及碳平捲需求隨價格下跌而減少。

Sales for the semiconductor industry declined both sequentially and year-over-year. However, our long-term outlook for this market remains positive due to the chipset and active reshoring. We continue to make investments to increase Reliance's capacity in semiconductor space support active and anticipated opportunities. Please refer to our earnings release for additional commentary on our end markets and product diversification.

半導體產業的銷售額環比和年比均下降。然而，由於晶片組和積極的回流，我們對該市場的長期前景仍然樂觀。我們繼續進行投資，以提高 Reliance 在半導體領域的產能，並支持積極的和預期的機會。請參閱我們的收益發布，以了解有關我們的終端市場和產品多元化的更多評論。

I will now turn the call over to Arthur to review our financial results and outlook.

我現在將把電話轉給亞瑟，以審查我們的財務業績和前景。

Thanks, Steve. Good morning, everyone. Reliance delivered solid performance across all financial metrics this quarter. Our net sales were in line with our expectations, down 6.6% from the second quarter, mainly due to seasonally lower volumes and lower selling prices. Pricing pressure across our major commodity products, in particular, carbon flat-rolled contributed to lower-than-anticipated tons sold.

謝謝，史蒂夫。大家，早安。 Reliance 本季在所有財務指標上均取得了穩健的業績。我們的淨銷售額符合我們的預期，較第二季下降 6.6%，主要是由於季節性銷售下降和售價下降。我們的主要大宗商品（特別是碳扁材）的定價壓力導致銷售低於預期。

Despite pricing declines in various macro headwinds, we produced year-over-year growth in tons sold and gained market share. While the pricing declines for most of our products resulted in temporary pressure on our margins as our cost on hand exceeded replacement costs. We nonetheless maintained a solid gross profit margin of 29.7%, supported by our value-added processing capabilities and generated earnings per share of $4.99 for the quarter. Higher-than-anticipated declines in carbon steel product prices contributed to a revision of our annual LIFO estimate from $120 million of income to $140 million of income.

儘管價格因各種宏觀不利因素而下降，但我們的銷量同比增長並獲得了市場份額。雖然我們大多數產品的價格下降導致我們的利潤暫時受到壓力，因為我們的現有成本超過了重置成本。儘管如此，在我們的增值處理能力的支持下，我們仍然保持了 29.7% 的穩健毛利率，本季每股收益為 4.99 美元。碳鋼產品價格降幅超出預期，導致我們將年度 LIFO 收入預測從 1.2 億美元調整為 1.4 億美元。

As a result, we recorded LIFO income of $45 million in the third quarter. Year-to-date, our LIFO income totaled $105 million. Based on our newly updated estimate, we expect $35 million of LIFO income in the fourth quarter. As of the end of this quarter, LIFO reserve of approximately $639 million in our balance sheet remains available to mitigate the impact of possible further declines in metal prices and benefit future period operating results.

因此，我們第三季的 LIFO 收入為 4500 萬美元。年初至今，我們的 LIFO 收入總計 1.05 億美元。根據我們最新更新的估計，我們預計第四季度的 LIFO 收入為 3500 萬美元。截至本季末，我們的資產負債表中仍有約 6.39 億美元的後進先出儲備，可用於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 third quarter same-store non-GAAP SG&A expenses declined by $25.3 million or 3.9% compared to the second quarter due to reduced compensation costs associated with lower FIFO profitability, along with lower variable costs associated with fewer tons sold. On a year-over-year basis, our same-store non-GAAP SG&A expenses were down $6.1 million or 1% due to lower incentive-based compensation resulting from lower FIFO profitability partially offset by higher compensation expenses associated with increased headcount and wage inflation.

繼續討論支出。與第二季相比，我們第三季同店非GAAP SG&A 費用下降了2,530 萬美元，即3.9%，原因是與FIFO 獲利能力下降相關的補償成本減少，以及與銷售噸數減少相關的可變成本降低。與去年同期相比，我們的同店非GAAP SG&A 費用減少了610 萬美元或1%，原因是FIFO 盈利能力下降導致基於激勵的薪酬降低，但因員工人數增加和工資上漲而導致的薪酬費用增加部分抵消了這一影響。

Our third quarter pretax income and margin of $388 million and 10.7%, declined from $510.9 million and 13.2% in the second quarter as a result of the aforementioned pricing pressures and their impact on our volumes and gross profit margin. Nevertheless, our EPS of $4.99 or $5 on a non-GAAP basis was within our guidance.

由於上述定價壓力及其對我們銷售和毛利率的影響，我們第三季的稅前收入和利潤率為 3.88 億美元和 10.7%，較第二季的 5.109 億美元和 13.2% 有所下降。儘管如此，我們的每股收益為 4.99 美元，以非 GAAP 計算為 5 美元，仍在我們的指導範圍內。

Turning to our balance sheet and cash flow. For the 2023 9-month period, our operating cash flow was $1.15 billion compared to $1.31 billion in the same 9-month period in 2022, as the impact of lower profitability was partially offset by lower working capital needs in 2023. Our inventory turn rate based on tons came in at 4.7x or 2.6 months on hand for the first 9 months of 2023, matching our company-wide goal of 4.7x, and it compared to 4.3x in the comparable period in 2022.

轉向我們的資產負債表和現金流。 2023 年9 個月期間，我們的營運現金流為11.5 億美元，而2022 年同期9 個月期間為13.1 億美元，因為獲利能力下降的影響被2023 年營運資金需求下降部分抵銷。我們的庫存週轉率2023 年前 9 個月，以噸計算，現有庫存量為 4.7 倍，即 2.6 個月，符合我們全公司 4.7 倍的目標，而 2022 年同期為 4.3 倍。

Our healthy inventory turn rate not only contributed to strong cash flow generation, but also helped soften the impact of declining prices on our gross profit margin. As announced in our earnings release, our Board of Directors approved an amendment to our share repurchase plan, replenishing our repurchase authorization to $1.5 billion. Our share repurchases in the month of October were $146.7 million, bringing the total purchases under our July 2022, $1 billion share repurchase authorization to $705 million. I'll now turn to our fourth quarter outlook.

我們健康的庫存週轉率不僅有助於產生強勁的現金流，還有助於減輕價格下跌對毛利率的影響。正如我們在財報中宣布的那樣，我們的董事會批准了對股票回購計畫的修訂，將我們的回購授權補充至 15 億美元。我們 10 月的股票回購金額為 1.467 億美元，使我們 2022 年 7 月授權的 10 億美元股票回購授權下的購買總額達到 7.05 億美元。現在我將談談我們的第四季展望。

Overall, we expect that underlying end market demand will remain relatively healthy in the fourth quarter of 2023. We expect 3.5% to 5.5% growth in our tons sold compared to the fourth quarter of 2022 were a sequential decline of 4% to 6%, consistent with seasonal trends. Although Reliance believes pricing for many products will be near trough levels in the current cycle at some point in the fourth quarter with certain product leveling off or increasing modestly, we expect our average selling price per ton sold for the fourth quarter to be down 4% to 6% compared to the third quarter.

整體而言，我們預計 2023 年第四季潛在終端市場需求將保持相對健康。與 2022 年第四季連續下降 4% 至 6% 相比，我們預計銷量將成長 3.5% 至 5.5%，與季節趨勢一致。儘管 Reliance 認為許多產品的定價將在第四季度的某個時候接近當前週期的低點，某些產品將趨於平穩或小幅上漲，但我們預計第四季度每噸的平均售價將下降 4%與第三季相比成長了6%。

We also anticipate continued modest temporary downward pressure on our gross profit margin from the declining metal pricing trends. Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $3.70 to $3.90 for the fourth quarter of 2023. In closing, we believe we have an industry-leading and a proven business model designed to navigate economic cycles and challenges and a strong balance sheet that collectively give us the confidence to continue pursuing profitable growth and fueling our strong cash flow and capital return activities.

我們也預計，金屬價格趨勢下降將持續對我們的毛利率造成適度的暫時下行壓力。根據這些預期，我們預計 2023 年第四季的非 GAAP 攤薄每股收益將在 3.70 美元至 3.90 美元之間。最後，我們相信我們擁有行業領先且經過驗證的商業模式，旨在駕馭經濟週期和挑戰和強勁的資產負債表共同使我們有信心繼續追求獲利成長並推動我們強勁的現金流和資本回報活動。

That concludes our comments. Thank you for your attention. We'll now open the call up to questions. Operator?

我們的評論到此結束。感謝您的關注。我們現在開始電話提問。操作員？

(Operator Instructions) Our first question is from Martin Englert with Seaport Research. Please proceed with your question.

（操作員說明）我們的第一個問題來自 Seaport Research 的 Martin Englert。請繼續你的問題。

I wanted to first touch on SG&A, and you did comment a bit on it in the prepared remarks, $627 million for the quarter, down from $651 million, I believe, sequentially.

我想先談談 SG&A，您在準備好的評論中確實對此發表了一些評論，我認為該季度的 SG&A 為 6.27 億美元，低於上一季的 6.51 億美元。

Could you briefly touch on your thoughts around SG&A for fourth quarter? Should we expect another step down sequentially here, but kind of still remaining above that $600 million mark.

您能否簡要談談您對第四季銷售、管理及行政費用 (SG&A) 的看法？我們是否應該預期這裡會繼續下降，但仍保持在 6 億美元大關之上。

Yes, Martin, good question. It should be consistent with seasonal patterns. So I mean, with fewer tons sold, there should be a little bit of a downward trend. But we're not necessarily putting out a specific guidance on SG&A though.

是的，馬丁，好問題。它應該與季節模式一致。所以我的意思是，隨著銷售量的減少，應該會有一點下降的趨勢。但我們不一定會就 SG&A 提供具體的指導。

Thank you for that. Looking across the different metals product lines here and your comments more broadly within the guidance on modest gross margin pressure quarter-on-quarter here. But are there any particular products where you feel here's where you're seeing the majority of the pricing pressure or margin pressure rather.

謝謝你。在這裡查看不同的金屬產品線，以及您在關於季度環比適度毛利率壓力的指導範圍內更廣泛的評論。但是，是否有任何特定產品讓您覺得這裡是您看到大部分定價壓力或利潤壓力的地方。

Martin, it's Karla. That's going to vary a lot based on each of the different products, the markets we're selling into the amount of value-added processing that we're doing. So generally, at a high overall level, when mills are announcing price increases, we're typically able to get a temporary margin expansion on those products.

馬丁，這是卡拉。根據每種不同的產品、我們銷售的市場以及我們正在進行的增值加工量，這會有很大差異。因此，一般來說，在整體水準較高的情況下，當鋼廠宣布漲價時，我們通常能夠暫時擴大這些產品的利潤率。

But when prices are declining and we're selling off our higher cost inventory that's on hand, you can see a little compression. So most products have been declining really for about the last 7 months. We've seen some consistent pricing pressure. So we've been dealing with that for several months. And I think our team has done a great job of being able to manage through that and maintain a very strong gross profit margin, although not at some of the peak levels we had seen recently.

但是，當價格下降並且我們正在出售現有的成本較高的庫存時，您會看到一點壓縮。因此，大多數產品在過去 7 個月左右確實一直在下降。我們看到了一些持續的定價壓力。所以我們已經處理這個問題幾個月了。我認為我們的團隊做得很好，能夠管理好這一點並保持非常強勁的毛利率，儘管沒有達到我們最近看到的一些峰值水平。

And with the current outlook, although there are price increases on certain products announced, and we anticipate there could be more and on some additional products. Overall, we're anticipating downward pressure at least compared to the average from Q3 into Q4. But we do think in a lot of our products, we'll see some leveling off. But overall, we expect some continued pressure.

從目前的前景來看，儘管已宣布的某些產品價格上漲，但我們預計一些其他產品的價格可能會上漲。總體而言，我們預計至少與第三季至第四季的平均值相比將面臨下行壓力。但我們確實認為，在我們的許多產品中，我們會看到一些趨於平穩的情況。但總體而言，我們預期壓力會持續存在。

Okay. Understood. I appreciate all the color. If I could one last quick one. And again, you just touched on this a little bit in the prepared remarks and no material impact in the tolling business from the UAW strike, but is this something like there might be just a bit of a delayed impact. Or based on what you're seeing today, well, kind of similar in kind of negligible implications on 4Q.

好的。明白了。我欣賞所有的顏色。如果我能快一點的話。再說一遍，您剛剛在準備好的發言中稍微提到了這一點，UAW 罷工對收費業務沒有實質影響，但這是否可能只是有點延遲的影響。或者根據你今天看到的情況，嗯，有點類似，但對第四季的影響可以忽略不計。

Yes, Martin. So in our tolling business, about 60% to 65% of our tolling is automotive related. And then a portion of that is related to the big 3 where the strike activity is occurring. And we've seen very limited impact so far.

是的，馬丁。因此，在我們的收費業務中，大約 60% 至 65% 的收費與汽車相關。其中一部分與發生罷工活動的三大巨頭有關。到目前為止，我們看到的影響非常有限。

However, each time the scope of the strike expands, we could see more impact. So there is some impact based on there being more locations on strike, in particular, the Ford plant in Kentucky. We will see a bit more impact we anticipate in Q4, but we're very hopeful that the strike will be resolved soon, and everyone will be back at work and will be back to normal levels. But even if there's a broad expansion, it will not be material to Reliance as a whole in the fourth quarter.

然而，每次罷工範圍擴大，我們都會看到更大的影響。因此，由於罷工地點較多，特別是肯塔基州的福特工廠，會產生一些影響。我們預計第四季會受到更多影響，但我們非常希望罷工能夠很快得到解決，每個人都將重返工作崗位並恢復到正常水平。但即使有廣泛的擴張，這對信實集團第四季的整體影響也不大。

All right. I appreciate that. Nice job navigating the down market.

好的。我很感激。在低端市場中航行得很好。

(Operator Instructions) Our next question comes from Phil Gibbs with KeyBanc Capital Markets.

（操作員說明）我們的下一個問題來自 KeyBanc Capital Markets 的 Phil Gibbs。

So firstly, I wanted a clarification on the buyback. I had read it as you had about $1.5 billion on a fresh authorization. And then, Arthur, I think you made some comment about almost $150 million purchased in October. Is that part of that $1.5 billion new buyback authorization? Or was that -- is this new one after that one? I'm trying to understand the comments.

首先，我想對回購進行澄清。我讀過它，因為你有大約 15 億美元的新授權。然後，亞瑟，我想你對 10 月購買的近 1.5 億美元發表了一些評論。這是 15 億美元新回購授權的一部分嗎？或者是──這是繼那個之後的新的嗎？我試圖理解這些評論。

Good question, Phil. No, the $150 million in October going against the previous authorization. The $1.5 billion starts fresh that -- the clock on that starts now.

好問題，菲爾。不，10 月的 1.5 億美元違反了先前的授權。 15 億美元重新開始——時鐘現在開始。

Okay. Perfect. And secondly, at least in my model, I had $425 million of cash CapEx for this year. I think at the midpoint, you said about $465 million. Did some CapEx get pulled into '23 from '24? Or are you adding new growth and capability projects?

好的。完美的。其次，至少在我的模型中，我今年的現金資本支出為 4.25 億美元。我想在中間，你說大約 4.65 億美元。是否有一些資本支出從 24 年拉入了 23 年？或者您正在添加新的成長和能力項目？

Yes, Phil. So we do an annual budget that we approved many, many projects for our many different companies. And that 2023 budget has remained consistent at $520 million. However, timing of some of those projects can slip -- the cash outlay can slip into a different year.

是的，菲爾。因此，我們制定了年度預算，為我們許多不同的公司批准了許多、許多項目。 2023 年預算維持在 5.2 億美元不變。然而，其中一些項目的時間可能會推遲——現金支出可能會推遲到不同的年份。

We know some of those $520 million projects will extend and some of the cash will go out into 2024. And with the extended lead times we've experienced for equipment, construction, et cetera, over the last couple of years, it has been more pronounced than historically. We've tried to give you guys a better idea of the cash outlay. So yes, earlier in the year, I think we maybe said $400 million to $450 million, we thought would be the cash outlay this year.

我們知道，其中一些 5.2 億美元的項目將延期，部分現金將支出到 2024 年。過去幾年，隨著我們在設備、施工等方面經歷的交付時間延長，比歷史上更明顯。我們試圖讓你們更了解現金支出。所以，是的，今年早些時候，我想我們可能說過 4 億至 4.5 億美元，我們認為這將是今年的現金支出。

We've seen some lead times come in a bit for some of the equipment, some of the projects accelerate a bit. And with that, we upped our cash outlay this year to $450 million to $475 million. Again, it's timing, and we're giving you our best estimate at different points in time on the cash outlay.

我們看到一些設備的交貨時間縮短，一些專案的進度有所加快。這樣，我們今年的現金支出就增加到了 4.5 億至 4.75 億美元。再說一遍，這是時間問題，我們將在不同時間點為您提供現金支出的最佳估計。

Our next question comes from Katja Jancic with BMO Capital Markets.

我們的下一個問題來自 BMO 資本市場的 Katja Jancic。

First, can you talk about what percent of orders right now includes value-added processing?

首先，您能談談目前包含加值加工的訂單比例是多少嗎？

Katja, this is Arthur. We don't normally update that disclosure throughout the year. But I mean, last time we provided an update, we said it was little over 50% and we expect to kind of be in that range. But we don't normally put out quarterly updates on that.

卡佳，這是亞瑟。我們通常不會全年更新該披露。但我的意思是，上次我們提供更新時，我們說這個比例略高於 50%，我們預計會在這個範圍內。但我們通常不會發布季度更新。

Okay. And is there expectation that with you continuously investing in value-added processing equipment that, that could grow over the next few years?

好的。隨著您不斷投資加值加工設備，您是否期望在未來幾年內能夠成長？

Katja, yes, we certainly do anticipate with the investments we're making that will grow. We've been a little over 50%, I think, for the last couple of years, but with certain acquisitions, including an acquisition we made in late 2021, that's more of a wholesale distribution model that does not perform value-added processing that maybe slowed a bit the incremental growth in orders with value-added processing.

Katja，是的，我們確實預期我們所做的投資將會成長。我認為，過去幾年我們的比例略高於 50%，但透過某些收購，包括我們在 2021 年底進行的收購，這更多是一種批發分銷模式，不執行增值處理，可能會稍微減緩增值加工訂單的增量成長。

But we certainly anticipate that we will continue to grow. We continue to see good opportunity from our customers and even from our suppliers on opportunities to do more and more for them and expand our value-added processing capabilities, and we're very happy to invest in those opportunities to help better support our customers.

但我們當然預期我們將繼續成長。我們繼續從客戶甚至供應商那裡看到良好的機會，為他們做越來越多的事情並擴大我們的增值加工能力，我們很高興投資這些機會，以幫助更好地支持我們的客戶。

And Katja, the only thing I would add to that is our value-added processing capabilities provide tremendous amount of stability to our gross profit margins and especially at times like this, when you have consecutive months of declining prices and when you're providing service, you have orders with value-added processing, those you tend to do much better on those than on the straight distribution orders. Just wanted to highlight that.

Katja，我唯一要補充的是，我們的增值處理能力為我們的毛利率提供了巨大的穩定性，尤其是在這樣的時候，當您的價格連續幾個月下降並且您提供服務時，您有進行加值處理的訂單，您傾向於在這些訂單上比直接分銷訂單做得更好。只是想強調這一點。

And then is it fair to assume that CapEx spending will stay elevated over the next few years given that there is a desire to continuously invest in growth.

鑑於人們希望持續投資於成長，可以合理地假設未來幾年資本支出將維持在較高水準。

Yes, Katja, we're actually in process on our 2024 CapEx budget now, and we'll be giving that number in February on our call. But as I just kind of alluded to, we do see continued opportunity from our customers, especially with a lot of the really positive things in the market right now with the different government stimulus and the activity we expect there as some of the suppliers expand capacity, we're able to work with them to get some opportunities there.

是的，Katja，我們實際上正在處理 2024 年資本支出預算，我們將在 2 月的電話會議上給出該數字。但正如我剛才提到的，我們確實看到了來自客戶的持續機會，特別是目前市場上有很多真正積極的事情，包括不同的政府刺激措施以及我們預期隨著一些供應商擴大產能而開展的活動，我們能夠與他們合作，在那裡獲得一些機會。

The reshoring, near-shoring is real, and that all provides increased opportunity for us. And we're fortunate to have our folks execute the way that they do that we have the strong cash flow and the balance sheet to be able to support our customers and continue to invest. So we don't have a number yet, but, we do anticipate a healthy budget next year because of the opportunity we see.

回流、近岸回流是真實存在的，這一切都為我們提供了更多的機會。我們很幸運，我們的員工按照他們的方式執行，我們擁有強勁的現金流和資產負債表，能夠支持我們的客戶並繼續投資。所以我們還沒有具體數字，但是，由於我們看到了機會，我們確實預計明年會有一個健康的預算。

Okay. If I may, one more. Karla, you mentioned the acquisition pipeline is solid. Can you talk a bit more, is there an increase in willingness of these companies to sell? What are the valuations you're seeing?

好的。如果可以的話，再來一張。卡拉，你提到收購通路很穩固。您能再多說一點嗎，這些公司的出售意願是否增加？您看到的估值是多少？

Yes. We've seen a flow. I think it's probably increased a bit more with the more traditional types of service center companies over the last 9 months or so. There were some opportunities that came to market in peak periods that it appears deals did not get completed.

是的。我們看到了一股潮流。我認為在過去 9 個月左右的時間裡，對於更傳統類型的服務中心公司來說，它可能會增加一些。有一些機會在高峰期進入市場，但似乎交易並未完成。

So we're seeing a few of those come back around. So we're expecting more reasonable expectations in our view on valuation. Reliance, we were very consistent on how we value companies looking at a normalized pretax income number for the long term going forward, and we value from that. We continue to do that. And do believe that we should be closer in expectations with some of those sellers, but not all sellers were expecting to be paid off of the peak.

所以我們看到其中一些回來了。因此，我們對估值的看法預計會有更合理的預期。值得信賴的是，我們對公司的估值方式非常一致，他們著眼於未來長期的標準化稅前收入數字，我們也從中重視。我們將繼續這樣做。並且確實相信我們應該與其中一些賣家的期望更接近，但並非所有賣家都期望從高峰期獲得回報。

The good companies that we acquire have been in this business for a long time. They understand that there are different cycles we go through and look at and understand our approach to the valuation that we expect to continue to be able to acquire more good companies, and we're excited with what we see out there.

我們收購的優秀公司已經從事這個行業很久了。他們明白，我們經歷了不同的週期，並審視並理解我們的估值方法，我們希望能夠繼續收購更多優秀的公司，我們對所看到的情況感到興奮。

There are no further questions at this time. I would like to turn the floor back over to Karla Lewis for closing comments.

目前沒有其他問題。我想把發言權交還給卡拉·劉易斯以徵求結束意見。

Great. Thanks again, everyone, for joining our call today, and thank you to our big Reliance family out there for all that you do every day. And before we close out the call, I'd like to remind everyone that we'll be in New York City in mid-November, presenting at the Goldman Sachs Metals and Mining Conference, and we hope to see many of you there.

偉大的。再次感謝大家今天加入我們的電話會議，並感謝我們 Reliance 大家庭每天所做的一切。在我們結束電話會議之前，我想提醒大家，我們將於 11 月中旬在紐約市舉行的高盛金屬和礦業會議上發表演講，我們希望在那裡見到你們中的許多人。

Thank you again to all of you for your continued support of Reliance.

再次感謝大家對 Reliance 的持續支持。

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。