Reliance Inc (RS) 2024 Q3 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to the Reliance in third quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference , please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando of Addo Investor Relations. Please go ahead.

女士們、先生們，早安，歡迎參加 Reliance 2024 年第三季財報電話會議。 此時，所有參與者都處於只聽模式。 正式演講後將舉行簡短的問答環節。 如果有人在會議期間需要接線員協助，請按電話鍵盤上的星號和零。 提醒一下，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)。 請繼續。

Thank you, operator. Good morning and thanks to all of you for joining our conference call to discuss Reliance's Third Quarter 2024 financial results. I'm joined by Karla Lewis, President and Chief Executive Officer, Steve Cook, Executive Vice President and Chief Operating Officer. In our third jamming, Senior Vice President and Chief Financial Officer.

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 2024 年第三季財務業績。 總裁兼執行長卡拉·劉易斯 (Karla Lewis) 和執行副總裁兼營運長史蒂夫·庫克 (Steve Cook) 也加入了我的行列。 在我們的第三次即興表演中，高級副總裁兼財務長。

A recording of this call will be posted on the Investors section of our website at investors dot reliant.com. 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. Reconciliations of the adjusted numbers are included in the non-GAAP reconciliation part of our earnings release.

本次電話會議的錄音將發佈在我們網站的投資人部分，網址為 Investors dot reliant.com。 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。

I will now turn the call over to Karla Lewis, President and CEO of Reliance .

我現在將把電話轉給 Reliance 總裁兼執行長 Karla Lewis。

Good morning, everyone, and thank you all for joining us today to discuss our third quarter business continued to execute well through challenging market conditions in the third quarter, once again outperforming industry shipments while maintaining gross profit margin within our sustainable range, which we refer to to as smart profitable growth. Although metals pricing declined more than anticipated.

大家早安，感謝大家今天加入我們討論我們的第三季度業務在第三季度充滿挑戰的市場條件下繼續表現良好，再次超越行業出貨量，同時將毛利率保持在我們的可持續範圍內，我們提到實現明智的獲利成長。 儘管金屬價格跌幅超出預期。

The inherent resilience of our business models, servicing diverse end markets with expensive value-added processing capabilities and quick turn orders as well as increased volume from our targeted growth efforts, helped to mitigate the impact of lower pricing on our gross profit margin and on our earnings level, resulting in non-GAAP earnings per diluted share of $3.64. In line with our guidance. In the third quarter, we generated 463.9 million in cash flow from operations. Operations, underpinned by strong profitability and effective working capital management through cyclical markets are consistently strong.

我們業務模式固有的彈性，透過昂貴的增值處理能力和快速週轉訂單以及我們目標成長努力增加的銷量來服務不同的終端市場，有助於減輕較低定價對我們毛利率和我們業務的影響。水平，導致非GAAP 攤薄每股收益為3.64 美元。 符合我們的指導。 第三季度，我們的營運現金流為4.639億美元。 在周期性市場的強勁獲利能力和有效營運資本管理的支撐下，業務始終保持強勁。

Cash flow continues to fuel execution in all elements of our capital allocation strategy. We invested 100, $12.8 million in capital expenditures, the majority of which was directed toward growth activities. Our CapEx budget for the calendar year 2024 remains $440 million, with an expected total cash outlay of approximately 425 to $450 million. Since our 1994 IPO, we have completed 76 acquisitions that support our growth strategy, expanding our product diversification and value-added processing capabilities.

現金流繼續推動我們資本配置策略所有要素的執行。 我們投資了 100 美元，即 1,280 萬美元的資本支出，其中大部分用於成長活動。 我們 2024 年的資本支出預算仍為 4.4 億美元，預計現金支出總額約為 425 至 4.5 億美元。 自 1994 年 IPO 以來，我們已完成 76 項收購，支持我們的成長策略，擴大我們的產品多元化和增值加工能力。

We've completed four acquisitions to date in 2024, including our August acquisition of certain toll processing assets of the FARO South division of Paragon corporation and the M&A pipeline remains active. We will continue with standards for well managed service centers and metals processors that possess strong brand equity and solid reputations in the marketplace and are immediately accretive to earnings.

迄今為止，我們已在 2024 年完成了四筆收購，包括 8 月收購 Paragon 公司 FARO South 部門的某些來料加工資產，併購管道仍然活躍。 我們將繼續實施管理良好的服務中心和金屬加工商的標準，這些中心和金屬加工商在市場上擁有強大的品牌資產和良好的聲譽，並能立即增加收益。

During the quarter, we repurchased 432 million of our common stock, reducing our total shares outstanding by nearly 3% as we opportunistically repurchase shares and the broader pullback in equity prices across the metal space. In addition, we paid $66 million in dividends, highlighting our ongoing commitment to our valued stockholders.

本季度，我們回購了 4.32 億股普通股，由於我們伺機回購股票以及整個金屬領域的股價普遍迴調，我們的流通股總數減少了近 3%。 此外，我們還支付了 6,600 萬美元的股息，突顯了我們對尊貴股東的持續承諾。

Next, I'd like to acknowledge some previously announced updates regarding our Board of Directors. We appointed Jim Kamsickas as an independent director effective October first. Increasing our board to nine members will look forward to Jim's contributions from his experience and expertise in industrial, manufacturing and safety, consistent with corporate governance, best practices and our strategic and deliberate long-term succession plan.

接下來，我想感謝之前宣布的有關我們董事會的一些最新情況。 我們任命 Jim Kamsickas 為獨立董事，10 月 1 日生效。 我們的董事會成員增加到九名，我們期待吉姆能利用他在工業、製造和安全方面的經驗和專業知識做出貢獻，這與公司治理、最佳實踐以及我們戰略性和深思熟慮的長期繼任計劃相一致。

Mark Kaminski will step down as our Non-Executive Chair on January first, 2025. Mark will continue to serve as an independent Board member, and we thank him for his many contributions as Chair since 2016. Doug Stotlar, a Director since 2016, will succeed Mark as our Independent Non-Executive Chair effective January first, 2025.

馬克‧卡明斯基(Mark Kaminski) 將於2025 年1 月1 日辭去我們的非執行主席職務。的許多貢獻。

Before my closing remarks, I'd like to acknowledge all who have been impacted by the severe weather events these past few weeks. While her came Hallein and hurricane Milton had minimal impacts on our consolidated result tactics, and we're very grateful to report that all Reliance personnel and their families are safe.

在我致閉幕詞之前，我要向所有在過去幾週受到惡劣天氣事件影響的人們表示感謝。 雖然她的到來哈林和颶風米爾頓對我們的綜合結果策略影響很小，但我們非常感激地報告所有 Reliance 人員及其家人都很安全。

In closing, I'd like to recognize our dedicated team at Reliance for their strong execution through challenging and increasingly competitive market dynamics and their continued commitment to working safely. Just last month, we celebrated 85 years in business and our 30th anniversary as a publicly traded company, which would not have been possible without the daily focus and contributions from each member of our Reliance family.

最後，我要對 Reliance 的敬業團隊表示認可，他們在充滿挑戰和競爭日益激烈的市場動態中表現出強大的執行力，並持續致力於安全工作。 就在上個月，我們慶祝了營業 85 週年和作為上市公司成立 30 週年，如果沒有 Reliance 家族每位成員的日常關注和貢獻，這是不可能實現的。

While heightened near-term uncertainty in the fourth quarter is contributing to headwinds in demand and pricing, our resilient business model and positive long-range view support our confidence in our ability to continue executing our strategic growth and stockholder return priorities.

儘管第四季度近期不確定性加劇導致需求和定價面臨阻力，但我們富有彈性的業務模式和積極的長期觀點支持我們對繼續執行策略成長和股東回報優先事項的能力充滿信心。

Thank you all for your time today. I will 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, Carla, and good morning, everyone. I'd like to begin by expressing my gratitude to our dedicated team for their commitment to operating safely and executing our strategy. On the now turn to our third quarter demand and pricing trends.

謝謝卡拉，大家早安。 首先，我要對我們的敬業團隊表示感謝，感謝他們致力於安全營運和執行我們的策略。 現在轉向我們第三季的需求和定價趨勢。

Our tons sold increased 7.1% or 3.7% on a same store basis compared to Q3 of 2023, significantly outperforming the service center industry decrease of 1.2% as reported by the MSCI well tons decreased 2.1% compared to the second quarter of 2024. We beat our expectations of down 2.5% to 4.0 rent due to increased shipments of carbon steel plate and structural products through the nonresidential construction market.

與2023 年第三季相比，我們的銷量成長了7.1%，同店銷量成長了3.7%，明顯優於MSCI 報告的服務中心產業1.2% 的下降幅度，與2024 年第二季相比，銷量下降了2.1%。

As the quarter progressed, we believe our growth and continued outperformance of our MSCI peers while maintaining industry-leading profitability or subservice and strategic investments in organic growth and acquisitions. Our third quarter average selling price per ton sold of $2,246 declined 4.3% compared to the second quarter of two 2024, exceeding our expectation of down 2% to 4% as carbon steel product prices declined more than anticipated as the quarter progressed.

隨著本季度的進展，我們相信我們的成長和持續超越 MSCI 同行的表現，同時保持行業領先的盈利能力或服務以及有機增長和收購方面的戰略投資。 與2024 年第二季相比，我們第三季每噸的平均售價為2,246 美元，下降了4.3%，超出了我們預期的下降2% 至4%，因為隨著本季的進展，碳鋼產品價格的下降幅度超過了預期。

Aluminum prices also declined. The global market corrected from the short-lived impact of Russian sanctions and the US market go with an abundance of low-priced imports. Stainless steel prices showed signs of stabilization. Next, I will turn to an overview of notable third quarter trends within our key end markets and products, beginning with nonresidential construction, carbon steel tubing plate and structural products, which are predominantly sold into the nonresidential construction market, represented about one-third of our sales in the third quarter.

鋁價也有所下跌。 全球市場從俄羅斯制裁的短暫影響中恢復過來，而美國市場則出現了大量低價進口產品。 不銹鋼價格出現穩定跡象。 接下來，我將概述我們的主要終端市場和產品中第三季度的顯著趨勢，首先是非住宅建築、碳鋼管板和結構產品，這些產品主要銷往非住宅建築市場，約佔整個市場的三分之一。

All three products had significant year-over-year growth, outperforming industry shipment levels. Our diversified exposure to nonresidential construction market, including publicly funded infrastructure projects, data centers and related energy projects supported solid demand for these products as its contribution from our recent acquisitions.

所有三種產品均較去年同期顯著成長，優於產業出貨水準。 我們對非住宅建築市場的多元化投資，包括公共資助的基礎設施項目、資料中心和相關能源項目，支持了對這些產品的強勁需求，這是我們最近收購的貢獻。

Despite macro economic uncertainty drilling projects in certain areas of the market. Our general manufacturing business, which represents roughly one-third of our total sales, is highly diversified across both products and industries, including industrial machinery, consumer products, heavy equipment and military shipments increased year over year across the broader manufacturing sector are primarily reflecting strength in industrial machinery, military, shipbuilding and rail, offsetting weaker demand in agricultural heavy equipment and household consumer products.

儘管宏觀經濟存在不確定性，但仍會在某些市場領域進行鑽探計畫。 我們的一般製造業務約占我們總銷售額的三分之一，在產品和產業上都高度多元化，包括工業機械、消費品、重型設備和軍事出貨量，整個製造業的出貨量較去年同期成長主要反映了實力工業機械、軍事、造船和鐵路領域，抵消了農業重型設備和家庭消費品需求疲軟的影響。

Our industry outperformance across key product groups shipping to general manufacturing applications highlights the benefits of our diverse certain in an environment, aerospace products comprise approximately 10% of our total sales. Commercial aerospace demand remains fundamentally healthy despite short-term production and supply chain challenges associated with the ongoing Boeing labor stoppage.

我們在運輸到一般製造應用的關鍵產品組中的行業優異表現突顯了我們在特定環境中的多元化優勢，航空航太產品約占我們總銷售額的 10%。 儘管波音持續停工導致生產和供應鏈面臨短期挑戰，但商業航空航太需求基本上保持健康。

Our defense related Aerospace and Space Program, demand remained stable at strong levels. We primarily serve as the automotive market through our toll processing operations, which are not included in our tons sold. Our tolling business, which represents 4% of our total sales, will improve demand in the third quarter of 2024 compared to the prior year due to healthy demand in both the US and Mexican automotive markets. And our ongoing investments to increase capacity.

我們的國防相關航空航太計畫的需求保持穩定在強勁水準。 我們主要透過來料加工業務為汽車市場提供服務，這不包括在我們的銷售中。 由於美國和墨西哥汽車市場的健康需求，我們的代加工業務占我們總銷售額的 4%，與前一年相比，2024 年第三季的需求將有所改善。 我們正在進行投資以提高產能。

Semiconductor industry demand remains subdued with continued excess inventories and supply chain, but showed signs of stabilization in certain areas. Our long-term outlook for the semiconductor market remains positive. Overall, we are experiencing relatively steady demand with continued strength in certain key end markets, counterbalancing pressures and other end markets.

由於庫存和供應鏈持續過剩，半導體產業需求依然低迷，但在某些領域顯示出穩定跡象。 我們對半導體市場的長期前景仍然樂觀。 整體而言，我們的需求相對穩定，某些關鍵終端市場持續走強，平衡了其他終端市場的壓力。

Please refer to our earnings release for additional commentary on our end markets and product diversification. We are very proud of our team's outstanding efforts enabled our continued industry leading performance, Reliance's unrivaled scale and strong balance sheet. The highly attractive partner to run those suppliers in all market conditions for lines continues to win new business from new and existing customers who recognize the quality and reliability of our service, as well as the breadth and depth of our product offerings and value added service capabilities.

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。 我們團隊的傑出努力使我們能夠持續保持業界領先的業績、Reliance 無與倫比的規模和強勁的資產負債表，我們對此感到非常自豪。 在所有市場條件下運營這些供應商的極具吸引力的合作夥伴將繼續贏得新客戶和現有客戶的新業務，他們認可我們服務的品質和可靠性，以及我們產品供應的廣度和深度以及增值服務能力。

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

我現在將把電話轉給我們的第三位來審查我們的財務表現和前景。

Thanks, Steve, and thank you, everyone, for joining today's call. Our third quarter 2024 non-GAAP diluted earnings per share of $3.64 came in toward the low end of our guided range, despite the difficult pricing environment, which was the primary driver of a 21.7% decrease in our non-GAAP diluted earnings per share compared to the second quarter of 2020 for our tons sold surpassed our expectations, leading us to outperform industry shipment levels to differentiating value.

謝謝史蒂夫，也謝謝大家參加今天的電話會議。 儘管定價環境困難，但我們的 2024 年第三季非 GAAP 稀釋每股收益為 3.64 美元，接近我們指導範圍的低端，這是我們非 GAAP 稀釋每股收益下降 21.7% 的主要原因到2020 年第二季度，我們的銷量超出了我們的預期，使我們的出貨量超出了行業水平，實現了差異化價值。

Our significant scale and diversified product offerings to diverse end markets is made evident in the current choppy economic environment as they allow us to participate in the pockets of the economy where activity is strong. These factors, along with our broad and expanding processing capabilities and industry leading quality of service, contributed to our 3.7% year over year growth in tons sold on a same-store basis in the third quarter, our gross profit margin declined from 29.8% in the second quarter to 29.4% in the third quarter from continued pricing headwind.

在當前動盪的經濟環境中，我們向不同終端市場提供的龐大且多樣化的產品顯而易見，因為它們使我們能夠參與經濟活動強勁的領域。 這些因素，加上我們廣泛且不斷擴大的加工能力和行業領先的服務質量，導致我們第三季度同店銷量同比增長 3.7%，毛利率從去年同期的 29.8% 下降。三季的29.4%，這得益於持續的定價逆風。

Again, our value-added processing capabilities moderated to decline in gross profit margin as orders with value-added processing continue to experience, it's significantly less gross profit margin contraction in times of declining prices versus orders without processing.

同樣，隨著進行增值處理的訂單不斷增加，我們的增值處理能力導致毛利率下降，與不進行處理的訂單相比，價格下降時毛利率的收縮要小得多。

Our LIFO inventory valuation method provides further stability to our gross profit margin by adjusting our cost of sales to align with current replacement costs. Consistent with our guidance. We recorded LIFO income of 50 million in the third quarter, and we continue to anticipate level income of 200 million for the full year 2024, which implies 50 million of LIFO income for the fourth quarter of 2024. As a reminder, life or for the fourth quarter will include a true up to our interim annual LIFO estimate based on year-end inventory levels.

我們的後進先出庫存估價方法透過調整我們的銷售成本以與當前的重置成本保持一致，進一步穩定了我們的毛利率。 與我們的指導一致。 我們第三季的後進先出收入為 5,000 萬，我們繼續預計 2024 年全年營收為 2 億，這意味著 2024 年第四季的後進先出營收為 5,000 萬。將包括基於年終庫存水準的真實的中期年度後進先出估計。

Factors such as inventory cost per ton trends, along with changes in product mix and quantities will impact our annual LIFO calculation should be 20 or the LIFO reserve on our balance sheet and was 429,300,000.0, which remains available to generate lifetime income benefit future periods operating results by mitigating the impact of potential further declines in metal prices.

每噸庫存成本趨勢等因素以及產品組合和數量的變化將影響我們的年度後進先出計算應為20 或我們資產負債表上的後進先出儲備金為429,300,000.0，這仍然可用於產生終身收入效益未來期間的經營績效減輕金屬價格潛在進一步下跌的影響。

Moving along to expenses, same-store non-GAAP SG&A expenses increased approximately 17 million or 30% year over year as a result of slightly higher same-store head count of 2% to support higher shipment levels and general wage inflation offset by lower incentive compensation. Sequentially, same-store non-GAAP SG&A expenses declined approximately 4 million or less than 1%.

費用方面，同店非GAAP SG&A 費用年增約1,700 萬美元，即30%，原因是同店員工人數略有增加2%，以支持更高的出貨水平，而總體工資上漲則被較低的激勵措施所抵消賠償。 隨後，同店非 GAAP SG&A 費用下降了約 400 萬美元或不到 1%。

Our model inherently normalizes expenses by rightsizing incentives as profits trend down. I'll now address our balance sheet and cash flow. Reliance generated operating cash flow of 463.9 million in the third quarter, largely flat compared to 466 million generated in the third quarter of 2023. The decline in our profitable equity was offset by higher working capital release, resulting in relatively consistent quarterly cash flow from operations are healthy.

當利潤下降時，我們的模型本質上是透過調整激勵措施來使支出正常化。 我現在將討論我們的資產負債表和現金流。 Reliance 第三季營運現金流為 4.639 億美元，與 2023 年第三季的 4.66 億美元基本持平。

Inventory turn rate based on tons of 4.6 times and accounts receivable DSO of 41 days also contributed to strong cash flow generation in the third quarter. Furthermore, our focus on inventory management help lessen the impact of declining prices on our gross profit margin. During the quarter, we invested 112.8 million in capital expenditures, completed a $23 million acquisition, returned $60.6 million to our stockholders through cash dividends and repurchased $432 million worth of our shares at an average cost of care.

4.6 噸的庫存週轉率和 41 天的應收帳款 DSO 也為第三季度強勁的現金流產生做出了貢獻。 此外，我們對庫存管理的關注有助於減輕價格下降對我們毛利率的影響。 本季度，我們投資了 1.128 億美元的資本支出，完成了 2,300 萬美元的收購，透過現金股息向股東返還 6,060 萬美元，並以平均護理成本回購了價值 4.32 億美元的股票。

In the first nine months of 2024, we have repurchased $951.3 million worth of our shares at an average cost of approximately $285 per share result in nearly a 6% reduction in total shares outstanding. As announced in our release, our Board of Directors approved a $1.5 billion refresh of our share repurchase plan, which we will use for ongoing opportunistic repurchases.

2024 年前 9 個月，我們以每股約 285 美元的平均成本回購了價值 9.513 億美元的股票，導致流通股總數減少了近 6%。 正如我們在新聞稿中宣布的那樣，我們的董事會批准了 15 億美元的股票回購計畫更新，我們將利用該計畫進行持續的機會性回購。

Our leverage position remains favorable with a net debt to EBITDA ratio of less than one, providing ample liquidity to continue executing our capital allocation priorities. As previously announced in mid-September, we entered into an amended and restated $1.5 billion five-year unsecured revolving credit facility with more favorable pricing and fewer restrictive covenants, reflecting our improved financial condition and upgraded credit ratings. Turning now to our fourth quarter outlook.

我們的槓桿狀況仍然有利，淨債務與 EBITDA 的比率低於 1，為繼續執行我們的資本配置優先事項提供了充足的流動性。 正如先前在9 月中旬宣布的那樣，我們簽訂了修訂並重述的15 億美元五年期無擔保循環信貸額度，定價更優惠，限制性條款更少，反映出我們財務狀況的改善和信用評級的升級。 現在轉向我們的第四季展望。

As discussed in our release this morning, due to normal seasonal trends and temporary headwinds from heightened macroeconomic and political uncertainty, we estimate our tons sold will be down 6% to 8% in the fourth quarter compared to the third quarter, but up 4% to 6% compared to fourth quarter of 2023 half to 2.5% attributable to same-store growth.

正如我們今天早上發布的報告中所討論的，由於正常的季節性趨勢以及宏觀經濟和政治不確定性加劇帶來的暫時阻力，我們估計第四季度的銷量將比第三季度下降6% 至8 %，但成長4%相比 2023 年第四季的 2.5% 成長一半至 6%，歸因於同店成長。

On the pricing side, we expect our average selling price per tons sold for the fourth quarter to be down 1.5% to 3.5% compared to the third quarter, reflecting continued pricing pressure across card and steel products. Roughly a third of the expected quarterly pricing decline is due to the entry point in the fourth quarter being below the 13 LIFO gross profit margins will stabilize in the fourth quarter from better alignment of replacement costs with inventory costs on hand as well as relatively lower anticipated selling price declines.

在定價方面，我們預計第四季的每噸平均售價將比第三季下降1.5%至3.5%，反映出卡片和鋼材產品持續的定價壓力。 預期季度定價下降的大約三分之一是由於第四季度的切入點低於13 LIFO 毛利率將在第四季度穩定下來，因為重置成本與現有庫存成本更好地保持一致以及相對較低的預期銷售價格下降。

Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $2.65 to $2.85 for the fourth quarter of 2020. For this concludes our prepared remarks. Thank you again for your time and participation, and we'll now open the call to questions. Operator.

根據這些預期，我們預計 2020 年第四季的非 GAAP 攤薄每股收益將在 2.65 美元至 2.85 美元之間。再次感謝您的時間和參與，我們現在將開始提問。 操作員。

Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, you may press star and do if you'd like to remove your question from the queue For participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

謝謝。 女士們、先生們，我們現在將進行問答環節。 如果您想提問，請按電話鍵盤上的星號和一。 確認音將表示您的線路已在問題佇列中，如果您想從佇列中刪除您的問題，您可以按星號並執行操作 對於使用揚聲器裝置的參與者。 按星號鍵之前可能需要拿起聽筒。 女士們、先生們，我們將在問題隊列聚集時稍等片刻。

The first question is from the line of Scott Johnson from BMO Capital Markets. Please go ahead.

第一個問題來自 BMO 資本市場的 Scott Johnson。 請繼續。

Hi, thank you for taking my questions. Maybe starting on the commentary about 4Q being impacted by temporary factors. Can you talk a bit about what gives you confidence that solve the impact in fourth QS. TempRite temporary and what will drive better demand? And then into next year, hypoxia as and she's joining the call today.

你好，謝謝你回答我的問題。 也許可以從有關第四季度受到臨時因素影響的評論開始。 您能談談是什麼讓您有信心解決第四個 QS 中的影響嗎？ TempRite 是暫時的，什麼會帶動更好的需求？ 然後進入明年，缺氧，她今天加入了電話會議。

We just as we reach out teams running our businesses who are close to our customers as we talk with them over the past week or two, there just seems to be more uncertainty at the customer level. And then we know have seen in prior periods, the presidential election being cited as quite a bit of that.

過去一兩週，當我們聯繫與客戶關係密切的業務營運團隊時，我們發現客戶層面似乎存在更多不確定性。 然後我們知道在之前的時期已經看到，總統選舉被引用為相當一部分。

I would say, overall, we're confident long term because either the administration seems to be supporting manufacturing and trade policy. And even if you know, investments had in different directions, whether it's on energy or or different area is most of those products, those solutions require steel of one kind or another. And with our diversified breadth of products, we expect to have a position wherever the policy may go.

我想說，總的來說，我們對長期充滿信心，因為政府似乎支持製造業和貿易政策。 即使您知道，投資有不同的方向，無論是能源還是不同領域的大部分產品，這些解決方案都需要一種或另一種鋼材。 憑藉我們多元化的產品，我們希望無論政策走向如何，我們都能佔有一席之地。

I it just seems that there's more trepidation of our customers trying to understand where is that headed? What impact? And when will the lower interest rates will help spur economic act activity? The question is at what point does that really kick in? We believe even 2025, maybe got January first.

我覺得我們的客戶似乎更惶恐不安，試圖了解這將走向何方？ 有什麼影響？ 較低的利率何時有助於刺激經濟活動？ 問題是什麼時候真正開始發揮作用？ 我們相信，即使是 2025 年，也可能是一月。

But with the trajectory as we move through 2025, we expect some pickup in activity related to that. So again, we are we also have heard of a few on customers taking extended shutdowns maybe over the holidays in Q4. So we're being probably a little cautious on with our Q4 guide just because there are a lot of factors that we can't control role.

但隨著 2025 年的發展軌跡，我們預計與此相關的活動將會回升。 再說一次，我們也聽說有一些客戶可能會在第四季的假期期間延長關閉時間。 因此，我們可能對第四季度的指南持謹慎態度，因為有很多因素是我們無法控制的。

But we do think having a presidential election behind us, the lower interest rates, the continued strong tailwinds that are there with a lot of unspent dollars still under the different government stimulus products that are often the industry up well for 2025.

但我們確實認為，總統選舉已經過去，利率較低，持續的強勁推動力仍然存在，在不同的政府刺激產品下仍有大量未支出的美元，這些產品通常會在2025 年推動該行業的良好發展。

And I know you're exposed to it through the tolling business, but are you hearing any slowdown in that market or that business? It for the most part from from the platforms we're on with our automotive toll processing customers. We have not seen a pullback. We think it will be normal seasonality for those businesses in Q4. And generally stable demand.

我知道您透過收費業務接觸到了這種情況，但是您是否聽到該市場或該業務有任何放緩的跡象？ 它大部分來自我們與汽車收費處理客戶合作的平台。 我們沒有看到回調。 我們認為第四季度這些業務將是正常的季節性。 且需求整體穩定。

You know, our platforms were off on a lot of the SUVs and light trucks, even some of the Super Duty trucks where there's a lot of demand and some ramp-up coming. So we as we read the headlines, we hear people are concerned. Also, again, the lower interest rates could help with consumer activity in the automotive market.

您知道，我們的平台已在許多 SUV 和輕型卡車上使用，甚至還有一些需求量很大且即將增加的超級卡車。 因此，當我們閱讀頭條新聞時，我們聽到人們感到擔憂。 此外，較低的利率也可能有助於汽車市場的消費者活動。

So we have not experienced a slowdown yet at currently expect stable activity.

因此，目前我們預期經濟活動將保持穩定，但尚未經歷放緩。

Thank you very much. Thanks, Scott. Yes, thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star and one. The next question comes from the line of Phil Gibbs from KeyBanc Capital Markets. Please go ahead.

非常感謝。 謝謝，斯科特。 是的，謝謝。 女士們先生們，提醒一下，如果您想提問，請按星號和一號。 下一個問題來自 KeyBanc Capital Markets 的 Phil Gibbs。 請繼續。

Good morning. Morning, Gerardo. So the pricing and mix in the third quarter was a little bit below what you all were anticipating with with the guidance and completely understandable with the market dynamics boats. I'm just trying to help me a little bit. one of the local reserve was changed to reflect that?

早安. 早上好，赫拉爾多。 因此，第三季的定價和組合略低於大家對指引的預期，並且完全可以理解市場動態船舶。 我只是想幫我一點點。 當地儲備之一已發生變化以反映這一點？

Yes. Good question, Phil. So we spoke to this briefly at the last call, but as we're seeing some things play out as the years progressing. So we're having some interesting mix impact this year that we really haven't seen in the past. There's some specialty aerospace products that had a really long lead times and the rest of our inventory cycling through and getting the lower replacement cost.

是的。 好問題，菲爾。 因此，我們在上次電話會議上簡短地談到了這一點，但隨著時間的推移，我們看到一些事情正在發生。 因此，今年我們產生了一些有趣的混合影響，這是我們過去從未見過的。 有一些特種航空航太產品的交貨時間非常長，而我們的其餘庫存則是循環使用並獲得較低的更換成本。

Some of these products have 50 to 70 week long lead times. So we're basically in the see the benefit of lower cost of those products in 2025. So was effectively happening is that, that is shifting some of that like-for-like income from 2024 into 2025.

其中一些產品的交貨時間長達 50 至 70 週。 因此，我們基本上會在 2025 年看到這些產品成本降低的好處。

And that's the primary reason why you haven't really seen us up our LIFO estimate for the year as the years progress because some of that impact is going to be self or realized in 2025. And so I would just add, you know, this is kind of a unique phenomenon in I've been here over 30 years.

這就是為什麼你沒有真正看到我們隨著時間的推移而提高今年的 LIFO 估計的主要原因，因為其中一些影響將在 2025 年自我實現或實現。我在這裡工作30 多年來的一種獨特現象。

And this is the first time we've really had something like this happen because the pricing of those products had basically it doubled and their high-priced products. And we've never seen lead times like that for associated with that. Large of a chunk of our inventory dollars are higher on a relatively lower volume just because of the type of products.

這是我們第一次真正發生這樣的事情，因為這些產品的定價基本上翻了一番，而且是高價產品。 我們從未見過與此相關的交貨時間如此之長。 由於產品類型的原因，我們的大部分庫存金額在相對較低的數量上較高。

So this is something we've been kind of learning as well. We've gone through the year this year and seeing the impact on life of those unique characteristics of those products. Well, you're not alone have an opportunity there. This further disposals were aligned. Question on the gross margins that you made about the fourth quarter.

所以這也是我們一直在學習的。 我們已經度過了今年的一年，並看到了這些產品的這些獨特特性對生活的影響。 好吧，你並不孤單有機會。 這進一步的處置是一致的。 關於第四季毛利率的問題。

You said you expected things to better align and stabilize in the fourth quarter. Does that mean that you expect the fourth quarter to be the trough for you? You are you saying you already saw the trough in the third quarter for pricing in the first quarter, right? So if you are forecasting that pricing in the first quarter will go up, then how does that imply that Q4 would be a trough, but just to be clear, we're not putting that in half for Q1 were for our view for pricing for Q1, but again, depending on our pricing in 2025.

您說您預計第四季度情況會更好地協調和穩定。 這是否意味著您預計第四季將是您的低谷？ 您是說您已經在第一季的定價中看到了第三季的低谷，對吧？ 因此，如果您預測第一季的定價將會上漲，那麼這如何意味著第四季度將是一個低谷，但需要明確的是，我們不會將第一季度的定價減半，因為我們對定價的看法第一季度，但同樣取決於我們 2025 年的定價。

And yes, I mean, if there are some some tailwinds in the beginning of the year, then presumably that would be true that the Q4 could be the trough. I'm just I appreciate, but I'm just saying relative to the third quarter loosely with third quarter, that's what you're saying, it's going to be lower than the third quarter, but still Blondo or is it going to be continued to weaken? Steph based on our guidance and consistent with the third quarter.

是的，我的意思是，如果今年年初出現一些順風，那麼第四季可能會是低潮。 我只是很欣賞，但我只是相對於第三季度鬆散地說，第三季度，這就是你所說的，它會低於第三季度，但仍然是金髮女郎，還是會繼續削弱？ 史蒂芬基於我們的指導並與第三季保持一致。

Okay. That's helpful. And then last one last question for me. On the semi side, are you largely due somebody's infrastructure from when I remember on somebody's going to consumables, but on the been a little bit squishy, but saying maybe seeing seeing some signs that might be stabilizing. What does that mean from from year end is just that the supply chain feels a little bit over-inventoried now that some of these projects have been a little bit deferred and that might be breaking out after the election cycle. Just trying to get some context behind them. I appreciate it.

好的。這很有幫助。 然後是我的最後一個問題。 在半成品方面，你很大程度上是由於某人的基礎設施，從我記得有人要去消耗品時起，但有點軟弱，但說也許看到一些可能穩定的跡象。 從年底開始，這意味著供應鏈感覺庫存有點過剩，因為其中一些項目已經有點推遲，而且可能會在選舉週期後爆發。 只是想了解他們背後的一些背景。 我很感激。

Thanks. It will be on the semiconductor. We do sell some into the consumables to the equipment manufacturers and then the infrastructure, as you mentioned, and it at one of our companies selling more into the consumables, we did see a little more activity in Q3.

謝謝。 它將在半導體上。 正如您所提到的，我們確實向設備製造商出售了一些消耗品，然後是基礎設施，在我們的一家公司中，我們銷售了更多的消耗品，我們確實在第三季度看到了更多的活動。

And then we had seen the last several quarters on as we see customers working through inventory glut that they had still some room to go on the equipment manufacturers pickup yet. And then on the infrastructure side, the new ship builds feel there are a lot of factors, I think, impacting timing. We're still very bullish long term.

然後我們看到過去幾個季度，我們看到客戶在庫存過剩的情況下工作，他們仍然有一些空間可以繼續設備製造商的提貨。 然後在基礎設施方面，我認為新船的建造有許多因素影響時機。 我們仍然非常看好長期前景。

I don't know how much of that is the election and we hear about, you know, permitting slowdowns, getting construction workers, just different reasons why it start and stop on some of the projects and most of the project, you see the big headline numbers, but a lot of them were planned in different phases where it wasn't all going to become immediately, which is quite honestly, a better environment or spread out a little bit. Thank you. Step-by-step.

我不知道其中有多少是選舉，我們聽說，你知道，允許放緩，招募建築工人，只是一些項目和大多數項目開始和停止的不同原因，你看到了大的頭條新聞，但其中很多都是在不同階段計劃的，這些階段不會全部立即實現，老實說，這是一個更好的環境或分散一點。 謝謝。 一步一步。

Thank you. Thank you. Ladies and gentlemen, (Operator Instructions) a s there are no further questions. I now hand the conference over to Karla Lewis, President and CEO for closing comments.

謝謝。 謝謝。 女士們、先生們，（操作員說明）沒有其他問題了。 我現在將會議交給總裁兼首席執行官卡拉·劉易斯 (Karla Lewis) 進行總結評論。

Thank you and thanks again to everyone who joined our call today. I would like to remind everyone that next month we'll be in Chicago presenting at Baird's Global Industrial Conference, and we hope to meet with many of you there. Also want to just reiterate our confidence and the ability of the Reliance team to operate well for all market conditions, even with some detail, special temporary headwinds in Q4. And we're confident with our team moving into 2025. And we'd like to thank our customers, our suppliers and our stockholders for all your support. Thank you.

謝謝您，並再次感謝今天加入我們電話會議的所有人。 我想提醒大家，下個月我們將在芝加哥出席貝爾德全球工業會議，我們希望在那裡與你們中的許多人見面。 我還想重申我們的信心和 Reliance 團隊在所有市場條件下良好運作的能力，即使在第四季度出現一些細節、特殊的臨時阻力。 我們對我們的團隊邁入 2025 年充滿信心。 謝謝。

Thank you. The conference of Reliance Bank has now concluded. Thank you for your participation. You may now disconnect your lines.

謝謝。 信實銀行的會議現已結束。 感謝您的參與。 現在您可以斷開線路。