Reliance Inc (RS) 2025 Q2 法說會逐字稿

Greetings, and welcome to the Reliance Inc., second quarter 2025 earnings hall. (Operator Instructions) As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Kim Orlando, with ADDO Investor Relations. Kim, please go ahead.

您好，歡迎來到 Reliance Inc. 2025 年第二季財報大廳。（操作員指示）提醒一下，本次會議正在錄音。現在我很高興將電話轉給主持人、ADDO 投資者關係部門的 Kim Orlando。金，請繼續。

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's Second Quarter 2025 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.

謝謝您，接線生。早安，感謝大家參加我們的電話會議，討論 Reliance 2025 年第二季的財務表現。與我一起出席的還有總裁兼首席執行官卡拉·劉易斯 (Karla Lewis)、執行副總裁兼首席營運官史蒂夫·科赫 (Steve Koch) 以及高級副總裁兼首席財務官亞瑟·阿傑米揚 (Arthur Ajemyan)。

A recording of this call will be posted on the investors section of our website at investor.reliance.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday 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.

本次電話會議的錄音將發佈在我們網站 investor.reliance.com 的投資者專區。請閱讀我們昨日發布的收益報告中包含的前瞻性聲明披露，並注意其適用於本次電話會議中的所有聲明。調整後數字的對帳包含在我們的收益報告的非 GAAP 對帳部分。

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

現在我將電話轉給 Reliance 總裁兼執行長 Karla Lewis。

Good morning, everyone, and thank you all for joining us today to discuss our second quarter 2025 performance. Our solid financial results once again demonstrated the resilience of our proven business model in a volatile environment.

大家早安，感謝大家今天加入我們，討論我們 2025 年第二季的業績。我們穩健的財務表現再次證明了我們成熟的商業模式在動盪環境中的韌性。

Our operating teams continue to excel in providing value to our customers and increasing our market share while effectively managing their businesses through ongoing market uncertainty.

我們的營運團隊繼續出色地為客戶提供價值並增加我們的市場份額，同時在持續的市場不確定性中有效地管理他們的業務。

Our record second quarter tonnes sold compared to last year once again significantly outperformed the industry average volume by 7 percentage points, which we attribute to our unparalleled scale, access to domestic metal, and breadth of processing capabilities.

與去年相比，我們第二季度的銷售噸數創下了紀錄，再次大幅超過行業平均水平 7 個百分點，這歸功於我們無與倫比的規模、國內金屬獲取渠道以及廣泛的加工能力。

Importantly, we maintained a gross profit margin within our sustainable range of 29% to 31%, in line with our smart profitable growth initiative.

重要的是，我們將毛利率維持在 29% 至 31% 的可持續範圍內，這與我們的智慧獲利成長計畫一致。

Our strong performance generated sequential increases in non-GAAP pre-tax income in excess of 15% and non-GAAP earnings per share of $4.43, an increase of more than 17% compared to the prior quarter.

我們的強勁表現使非公認會計準則稅前收入環比增長超過 15%，非公認會計準則每股收益達到 4.43 美元，較上一季增長超過 17%。

Our capital allocation framework remains unchanged and our long-term focus continues to guide both our growth and stockholder return strategies. Reliance generated $229 million of cash flow from operations in the second quarter.

我們的資本配置框架保持不變，我們的長期重點繼續指導我們的成長和股東回報策略。信實公司第二季的營運現金流為 2.29 億美元。

Our strong cash flow continues to support investments in advanced value-added processing equipment, organic growth, and accretive acquisitions that position Reliance for growth in all market environments.

我們強勁的現金流持續支持對先進加值加工設備、有機成長和增值收購的投資，使 Reliance 能夠在所有市場環境中實現成長。

Our 2025 capital expenditure budget remains at $325 million with over 50% dedicated to growth projects.

我們的 2025 年資本支出預算仍為 3.25 億美元，其中 50% 以上用於成長項目。

Our expected total cash outlay for 2025 is expected to be in the $360 million to $380 million range, reflecting carry-over projects from prior years that will be completed this year.

我們預計 2025 年的總現金支出將在 3.6 億美元至 3.8 億美元之間，這反映了今年將完成的前幾年的結轉項目。

Our second-quarter results include benefits from our 2024 acquisitions, and we remain in a position of financial strength to execute on M&A opportunities that align with our disciplined criteria. We continue to see new acquisition opportunities despite continuing macroeconomic uncertainty. And we will maintain our focus on pursuing opportunities that expand our geographic footprint and the value-added metal processing solutions we offer our customers, align with our emphasis on smart profitable growth, and complement our strong gross profit margin profile.

我們第二季的業績包含了 2024 年收購帶來的收益，並且我們仍然擁有雄厚的財務實力來執行符合我們嚴格標準的併購機會。儘管宏觀經濟仍存在不確定性，但我們仍然看到新的收購機會。我們將繼續專注於尋求機會擴大我們的地理覆蓋範圍和我們為客戶提供的增值金屬加工解決方案，與我們對智慧獲利成長的重視保持一致，並補充我們強勁的毛利率狀況。

We also remain committed to returning capital to our stockholders. We returned $143 million to our stockholders in the second quarter in dividends and share repurchases. And we have repurchased over 1.2 million shares year-to-date at favorable prices.

我們也將繼續致力於向股東返還資本。我們在第二季以股利和股票回購的形式向股東返還了 1.43 億美元。今年迄今為止，我們已經以優惠價格回購了超過 120 萬股。

In summary, I'm pleased with our strong operational execution in the second quarter, particularly given the rapidly changing trade environment. Our resilience reflects both the strength of our business model and the unwavering dedication of our team, whose commitment to safely delivering industry-leading solutions continues to expand and deepen our customer relationships.

總而言之，我對我們第二季強勁的營運執行感到滿意，特別是在快速變化的貿易環境下。我們的韌性既反映了我們商業模式的優勢，也反映了我們團隊堅定不移的奉獻精神，他們致力於安全地提供業界領先的解決方案，不斷擴大和深化我們的客戶關係。

While we anticipate some weakness in the third quarter, we remain confident in our ability to grow amid ongoing market uncertainty and take advantage of improved demand and pricing environments as we emerge from these highly uncertain times. And encouraging trends in our key end markets, including signs of reshoring activity, are creating additional tailwinds as we look ahead.

雖然我們預計第三季會出現一些疲軟，但我們仍然對自己在持續的市場不確定性中實現成長的能力充滿信心，並在走出這些高度不確定的時期時利用改善的需求和定價環境。展望未來，我們主要終端市場的令人鼓舞的趨勢（包括回流活動的跡象）正在創造額外的順風。

Moreover, our long-standing practice of primarily sourcing our metal from domestic mills and operating in the United States provides a strong competitive advantage in the current trade environment. Our focus remains firmly on long-term success with a disciplined approach to value creation for all Reliance stakeholders.

此外，我們長期以來主要從國內鋼廠採購金屬並在美國開展業務的做法，在當前的貿易環境中提供了強大的競爭優勢。我們始終專注於長期成功，並採取嚴謹的方法為所有 Reliance 利害關係人創造價值。

I'll now turn the call over to our COO, Steve Koch, who will review our demand and pricing trends.

現在我將電話轉給我們的營運長史蒂夫·科赫，他將回顧我們的需求和定價趨勢。

Thanks, Karla, and good morning, everyone. I'd like to start by thanking our dedicated team for driving operational success across the board, while upholding the highest safety standards.

謝謝，卡拉，大家早安。首先，我要感謝我們敬業的團隊在堅持最高安全標準的同時，也推動了全面的營運成功。

I'll now turn to our demand and pricing trends. Our second quarter tonne sold decreased 0.9% compared to the first quarter of 2025, in line with our outlook of down 1% to up 1%, even when considering the effective demand pull forward into Q1 due to tariff activity.

現在我將談談我們的需求和定價趨勢。與 2025 年第一季相比，我們第二季的銷售噸位下降了 0.9%，符合我們下降 1% 至上升 1% 的預測，即使考慮到關稅活動導致的有效需求提前到第一季。

Compared to the second quarter of 2024, our tonnes sold increased 4%. Significantly outperforming the service center in our industries' year-over-year decline of 3.1% as reported by the MSCI.

與 2024 年第二季相比，我們的銷量增加了 4%。根據 MSCI 報告，我們產業的年減幅度為 3.1%，而服務中心的表現則明顯優於該產業。

Our increased shipments are attributable to market share gains as a result of our smart profitable growth strategy and continued investments in organic growth.

我們的出貨量增加歸因於我們明智的獲利成長策略和對有機成長的持續投資所帶來的市場份額的增加。

Our second quarter average selling price per tonne sold increased 6.1% compared to the first quarter of 2025, doubling the high end of our expected range of up 1% to 3%, reflecting the strong tariff-driven momentum for both demand and pricing near the end of the first quarter.

我們第二季每噸平均售價與 2025 年第一季相比上漲了 6.1%，是我們預期漲幅 1% 至 3% 區間高端的兩倍，反映出第一季末受關稅驅動的需求和定價勢頭強勁。

Pricing for many carbon and aluminum products peaked in April, but then declined for the remainder of the second quarter. Sales pricing declined modestly in the quarter, and these products were less sensitive to trade policy in the short term.

許多碳和鋁產品的價格在四月達到峰值，但在第二季度剩餘時間內有所下降。本季銷售價格小幅下降，這些產品短期內對貿易政策的敏感度較低。

As Arthur will expand upon shortly in reviewing our outlook for Q3, pricing for most products has remained steady entering the third quarter.

正如亞瑟在回顧我們對第三季度的展望時即將闡述的那樣，進入第三季度，大多數產品的價格保持穩定。

Next, I will review notable trends within our key end markets and products beginning with non-residential construction. Carbon steel tubing, plate, and structural products which we predominantly sell into the non-residential construction market represent roughly one-third of our Q2 2025 sales.

接下來，我將從非住宅建築開始回顧我們的主要終端市場和產品中的顯著趨勢。我們主要向非住宅建築市場銷售的碳鋼管、板材和結構產品約占我們 2025 年第二季銷售額的三分之一。

Compared to last year, ships for all three products were up in the second quarter. Improved demand for Reliance's products was driven by Reliance’s of scale and geographic diversity to allow the company to benefit from heightened data center construction and related infrastructure, as well as publicly-funded infrastructure projects such as schools, hospitals, and airports.

與去年同期相比，第二季這三種產品的出貨量均有所增加。Reliance 的產品需求不斷增長，這得益於其規模和地理多樣性，這使得該公司能夠從資料中心和相關基礎設施的加強建設以及學校、醫院和機場等公共資助的基礎設施項目中受益。

Our general manufacturing business, which also represented roughly one-third of our total sales in Q2 2025, is highly diversified across geographies, products, and industries. Shipments increased year-over-year, and shipments related to rail and ship-related transportation projects, and heavy construction equipment were particularly strong in the second quarter, demonstrating Reliance's ability to capture share even in challenged manufacturing markets.

我們的一般製造業務在 2025 年第二季也占我們總銷售額的約三分之一，在地域、產品和產業方面高度多樣化。出貨量年增，第二季與鐵路和船舶運輸項目以及重型建築設備相關的出貨量尤為強勁，顯示 Reliance 即使在充滿挑戰的製造業市場中也能夠佔據市場份額。

While shipments to consumer products and industrial-sharing markets also improved year-over-year. Demand in those markets remains comparably softer than other manufacturing sectors. Our continued ability to outperform the industry across key product groups, shipping to general manufacturing applications, highlights the versatility and competitive advantage of our diversified business model in a fluid macroeconomic and policy environment and our ability to grow with new and existing customers.

而消費品和工業共享市場的出貨量也較去年同期增加。這些市場的需求仍然比其他製造業領域相對疲軟。我們在關鍵產品組、運輸到一般製造應用方面持續超越行業的實力，凸顯了我們多元化業務模式在不斷變化的宏觀經濟和政策環境中的多功能性和競爭優勢，以及我們與新舊客戶共同成長的能力。

Aerospace products comprise approximately 10% of our Q2 2025 sales. Demand for commercial aerospace was stable compared to the first quarter of 2025 and the second quarter of 2024. Demand for defense-related aerospace and space programs remained consistent at strong levels.

航空航太產品約占我們 2025 年第二季銷售額的 10%。與 2025 年第一季和 2024 年第二季相比，商用航空航太的需求保持穩定。對國防相關航空航太計畫的需求保持強勁。

We primarily service the automotive market through our toll-processing operations, which are not included in our tonnes sold. Our tolling business, which represented approximately 4% of our Q2 2025 sales, saw processed tonnes stay relatively consistent with both the first quarter of 2025 and the second quarter of 2024, supported by our capacity expansions. The semiconductor industry remained under pressure in the second quarter due to ongoing excess inventory from the supply chain.

我們主要透過收費加工業務為汽車市場提供服務，但這不包括在我們的銷售噸數中。我們的來料加工業務約占我們 2025 年第二季銷售額的 4%，在產能擴張的支持下，加工噸數與 2025 年第一季和 2024 年第二季保持相對一致。由於供應鏈持續的庫存過剩，半導體產業在第二季依然面臨壓力。

In summary, I thank our team for executing effectively and safely through dynamic operating conditions. The breadth and depth of our value-added processing capabilities, high-quality products, and reliable customer service, continue to win Reliance on new customers and increase our market share.

總而言之，我感謝我們的團隊在動態的運作條件下有效且安全地執行任務。我們的增值加工能力的廣度和深度、高品質的產品以及可靠的客戶服務，不斷贏得新客戶的信賴並增加我們的市場份額。

Reliance's long-term dedication to domestic metal sourcing, along with our industry-leading scale and strong balance sheet, makes us a highly attractive partner to our mill suppliers in all market conditions.

Reliance 長期致力於國內金屬採購，加上我們行業領先的規模和強大的資產負債表，使我們成為所有市場條件下工廠供應商極具吸引力的合作夥伴。

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

現在，我將把電話轉給我們的財務長 Arthur Ajeyman，以審查我們的財務表現和前景。

Thanks, Steve, and thanks, everyone for joining us today. Our second quarter operating performance was strong. With shipment levels in line with our guidance, despite some demand pulled forward into Q1 and higher than anticipated average selling prices.

謝謝史蒂夫，也謝謝大家今天的到來。我們第二季的經營業績強勁。儘管部分需求提前進入第一季且平均售價高於預期，但出貨量水準符合我們的預期。

Our second quarter non-GAAP earnings for diluted share of $4.43 demonstrated strong growth of 17.5% compared to the first quarter of 2025 in a mixed pricing environment that reflected the following dynamics. Pricing for many carbon steel products peaked in April and retreated through the balance of the quarter, resulting in the cost of our inventory on hand, exceeding replacement costs. At the same time, shorter product lead times starting in March, continuing through May, accelerated our receipt of higher cost material. These factors contributed to non-GAAP LIFO gross profit margin realization that was slightly lower than expected. Increasing moderately from 30.4% in Q1 of 2025 to 30.6% in Q2 of 2025. LIFO non-GAAP gross profit margin also rose by 20 basis points to 29.9% in Q2, with both quarters including $25 million of LIFO expense.

我們第二季的非公認會計準則攤薄收益為 4.43 美元，與 2025 年第一季相比，在混合定價環境下強勁成長 17.5%，反映了以下動態。許多碳鋼產品的價格在四月達到峰值，並在本季剩餘時間內回落，導致我們庫存的成本超過了重置成本。同時，從三月開始一直持續到五月的產品交付週期縮短，加速了我們收到更高成本的材料。這些因素導致非公認會計準則後進先出法毛利率實現略低於預期。從 2025 年第一季的 30.4% 溫和成長至 2025 年第二季的 30.6%。第二季度，後進先出法非公認會計準則毛利率也上升了 20 個基點，達到 29.9%，兩季均包含 2,500 萬美元的後進先出法費用。

For the full year 2025, we are maintaining our LIFO estimate of $100 million of expense. As of June 30, 2025, the LIFO reserve on our balance sheet was $485 million, which remains available to benefit future period operating results and mitigate the impact of potential declines in metal prices.

對於 2025 年全年，我們維持後進先出法估計的 1 億美元支出。截至 2025 年 6 月 30 日，我們資產負債表上的後進先出儲備金為 4.85 億美元，該儲備金仍可用於支持未來期間的經營業績並減輕金屬價格潛在下跌的影響。

Turning to expenses. Our second quarter and six month period, same store, non-GAAP SG&A expenses were up 6.2% and 3.1% respectively compared to the same periods in 2024, reflecting the impact of inflationary wage adjustments, increased variable warehousing, and delivery expenses associated with increases in our time sold, and higher incentive compensation related to increased FIFO profitability. On a per tonne basis, our same store non-GAAP SG&A expenses increased only 2% compared to the second quarter of last year and actually declined 1.7% for the first half of 2025 versus the same period in 2024, demonstrating the operating leverage achieved through our organic growth strategy.

談到費用。與 2024 年同期相比，我們的第二季度和六個月期間同店非 GAAP 銷售、一般及行政費用分別增長了 6.2% 和 3.1%，這反映了通貨膨脹工資調整、可變倉儲和運輸費用增加以及與銷售時間增加相關的配送費用增加，以及與 FIFO 盈利能力提高相關的更高激勵薪酬的影響。以每噸計算，我們的同店非 GAAP 銷售、一般及行政費用與去年第二季度相比僅增加 2%，而 2025 年上半年與 2024 年同期相比實際上下降了 1.7%，這體現了我們透過有機成長策略實現的經營槓桿。

I'll now address our balance sheet and cash flow. We generated $229 million in operating cash flow in Q2, despite over $100 million investment in working capital, mainly due to higher medical costs. We use that cash to fund $88 million in capital expenditures, a $63 million in dividends, and repurchased $80 million in our shares at an average price of $265 per share.

我現在來談談我們的資產負債表和現金流。儘管由於醫療成本增加，我們在營運資本上投資超過 1 億美元，但我們在第二季度仍產生了 2.29 億美元的營運現金流。我們利用這筆現金來支付 8,800 萬美元的資本支出、6,300 萬美元的股息，並以每股 265 美元的平均價格回購了 8,000 萬美元的股票。

Year-to-date, our repurchases have reduced our total shares outstanding by 2%. We still have approximately $1 billion available under our $1.5 billion share repurchase plan that we refreshed in October 2024.

今年迄今為止，我們的回購已使我們的流通股總數減少了 2%。根據我們於 2024 年 10 月更新的 15 億美元股票回購計劃，我們仍有約 10 億美元可用。

As of June 30, our total debt was $1.43 billion, including a $48 million reduction in borrowings on our revolving credit facility during Q2. Our leverage position remains favorable with the net debt to EBITDA ratio of less than 1, providing significant liquidity to continue executing our capital allocation priority.

截至 6 月 30 日，我們的總債務為 14.3 億美元，其中包括第二季循環信貸額度減少的 4,800 萬美元。我們的槓桿狀況依然良好，淨債務與 EBITDA 比率低於 1，為繼續執行我們的資本配置優先提供了充足的流動性。

Moving on to outlook for the third quarter. Looking ahead, we anticipate demand across our diversified end markets to remain stable in the third quarter, subject to normal seasonal patterns, which reduce our shipping volumes due to planned customer shutdowns and vacation schedules, as well as ongoing domestic, international trade and economic policy uncertainty.

繼續展望第三季。展望未來，我們預計，受正常季節性模式的影響，我們多元化終端市場的需求在第三季度將保持穩定，由於計劃中的客戶停工和休假安排，以及持續的國內、國際貿易和經濟政策不確定性，我們的運輸量將減少。

Accordingly, we estimate our tonnes sold will be down 1% to 3% compared to the second quarter of 2025, but more importantly, up 3% to 5% compared to the third quarter of 2024. We do, however, anticipate pricing will stay relatively consistent with current levels throughout the third quarter. Which will result in our average selling price per tonne sold will be down 1% to up 1% compared to the second quarter, largely driven by lower prices for carbon steel products, partially offset by higher prices for certain aluminum stainless products.

因此，我們估計，與 2025 年第二季相比，我們的銷售噸數將下降 1% 至 3%，但更重要的是，與 2024 年第三季相比，我們的銷售噸數將增加 3% 至 5%。不過，我們預計整個第三季價格將與當前水準保持相對一致。這將導致我們每噸產品的平均售價與第二季度相比下降 1% 至上漲 1%，這主要是由於碳鋼產品價格下跌，但部分被某些鋁不銹鋼產品價格上漲所抵消。

As a result, we anticipate our FIFO gross profit margin will remain under some pressure in Q3. Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $3.60 to $3.80 for Q3, inclusive of quarterly LIFO expense of $25 million or $0.36 per diluted share. This concludes our prepared remarks. Thank you again for your time and participation. We'll now open the call for your questions. Operator?

因此，我們預計第三季我們的 FIFO 毛利率仍將面臨一定壓力。根據這些預期，我們預計第三季非公認會計準則每股攤薄收益將在 3.60 美元至 3.80 美元之間，其中包括季度後進先出費用 2,500 萬美元或每股攤薄收益 0.36 美元。我們的準備好的演講到此結束。再次感謝您的時間和參與。我們現在開始回答大家的提問。操作員？

(Operator Instructions) Martin Englert, Seaport Research Partners.

（操作員指示）Martin Englert，海港研究合作夥伴。

Hello, good morning, everyone.

哈嘍，大家早安。

Good Morning, Martin.

早安，馬丁。

Question on the guidance. Within the guide. that that FIFO gross margins expected to remain pressured. Is that meant to imply sequential weakness or rather a continuation of levels comparable to 2Q?

關於指導的問題。在指南中，FIFO 毛利率預計仍將面臨壓力。這是否意味著連續疲軟，或延續與第二季相當的水平？

Hey Martin, so Q3, if you recall, for Reliance and in our industry, typically there is some demand weakness just due to normal seasonal patterns. During July and different summer months, not only do a lot of the big OEM-type customers shut down for scheduled maintenance.

嘿，馬丁，所以第三季度，如果你還記得的話，對於 Reliance 和我們的行業來說，通常由於正常的季節性模式，會出現一些需求疲軟的情況。在七月和其他夏季月份，許多大型 OEM 類型的客戶不僅會因定期維護而停工。

That flows down to more of our customer base through their subs. And we also see in some of our smaller customers which make up a big portion of our customer base. They will oftentimes shut their locations down here and there during the summer for their employees to take vacations. So nothing in our view out of the ordinary. We probably guided, I think, from a demand standpoint a little stronger in Q3 than we do typically from the seasonal slowdown. And also, it's still year-over-year stronger and we've been trending our demand has been stronger in our year-over-year quarters -- all year so far. And so we feel good about it on the pricing side. We can talk a little more, but in Q2, there were, we would say, it was a little atypical from our normal cycle.

這會透過他們的訂閱流向更多的客戶群。我們也發現一些較小的客戶佔據了我們客戶群的很大一部分。他們經常在夏季關閉一些辦公場所，讓員工休假。所以在我們看來，這沒什麼不正常的。我認為，從需求角度來看，我們第三季的預期可能比季節性放緩時預期的預期要強一些。而且，它仍然比去年同期更強勁，而且我們一直趨勢是，我們的需求在同比季度中一直更強勁——今年到目前為止。因此，我們對定價方面感到滿意。我們可以多談一點，但在第二季度，我們會說，這與我們的正常週期有點不典型。

If you recall at the end of Q1, we talked about some potential demand pull forward into Q1 and there were price increases. Prices had good momentum when we spoke to everyone in April and gave our Q2 guide. But prices kind of peaked out, especially on a lot of the carbon products in April. And then we talked prices decline. And so we had some margin -- gross profit margin compression in Q2, typically in a rising price environment. We would expect that to expand, which was in our guidance. So we might be a little more hesitant going into our Q3 guide now. Although on the pricing side, there's weakness in a couple. Most products we think are fairly steady. And we see upside aluminum prices did increase in Q2 and hold because of some of the tariff-related impact on their input cost.

如果您還記得，在第一季末，我們談到了一些潛在的需求拉動進入第一季度，並且價格上漲了。當我們在四月與大家交談並提供第二季度指南時，價格勢頭良好。但價格已經達到頂峰，尤其是四月的許多碳產品價格。然後我們談到價格下跌。因此，我們在第二季的毛利率出現了一些壓縮，這通常是在價格上漲的環境下。我們預計這一數字將會擴大，這也符合我們的預期。因此，我們現在可能對第三季指南有些猶豫。儘管在定價方面，存在一些弱點。我們認為大多數產品都相當穩定。我們看到鋁價在第二季確實上漲，並且由於關稅對其投入成本的一些影響而保持上漲。

So we -- and we expect that to continue to flow through in Q3 as well as a base price increase on stainless near the end of Q2, so there's a little lag to work that in. But overall, we did imply some continued pressure on gross profit margin in Q3 primarily, it's just very uncertain out there that the tariff uncertainty does -- we believe, has been holding back some of the buying by many customers throughout the space. We think once that gets unlocked, we feel very good about where we in the industry will go for the rest of you know the year or at whatever point tariffs get resolved.

因此，我們預計這一趨勢將在第三季度繼續延續，同時不銹鋼的基本價格也將在第二季末上漲，因此需要一點時間才能實現這一目標。但總體而言，我們確實暗示第三季毛利率將繼續面臨壓力，主要是因為關稅的不確定性非常不確定——我們認為，這阻礙了整個領域中許多客戶的購買。我們認為，一旦解除關稅限制，我們對今年剩餘時間或關稅問題解決時產業的發展前景感到非常樂觀。

Okay. So more generally, just a more conservative tone, given -- more conservative guidance overall based off of how second quarter transpired and given some of the uncertainty out in the market, is that a fair characterization?

好的。因此，更普遍地說，只是一種更保守的基調——根據第二季度的進展情況以及市場上的一些不確定性，總體而言，指導更為保守，這是一個公平的描述嗎？

That is fair. And we can only guide to what we see and what we believe is happening in our business. We unfortunately can't control what consensus or other expectations look like out there for us and whether or not they're in line with what we see happening in the market.

這很公平。我們只能根據我們所看到的和我們認為在我們的業務中正在發生的事情進行指導。不幸的是，我們無法控制外界對我們的共識或其他期望，也無法控制它們是否與我們在市場上看到的一致。

Okay. You did touch on this, but I want to see if there's any more that you'd like to highlight what customers have been saying about the tariff environment, the impact on their business. Anything else that you've been seeing or observing about them?

好的。您確實提到了這一點，但我想看看您是否還有更多想強調的內容，即客戶對關稅環境及其對其業務的影響的看法。您也看到或觀察到了關於它們的其他情況嗎？

Yeah. I think we just -- I would say what's a real positive for us, Martin, is we continue, especially in our kind of non-res construction business, we continue to see new activity. In other types of projects, we do some of the smaller projects that space for us remains active. We're not saying it's growing, but it is not declining. And our management teams selling into that space are very confident and upbeat about what's going on in those markets. Certainly, data center is a strong pullthere. And that Reliance with, the breadth of the different products we sell we're not just selling into the foundational construction of the data center buildings. We have a lot of different products that also go internally into the data centers and the electrification of that.

是的。我認為我們只是——我想說，馬丁，對我們來說真正積極的是，我們繼續，特別是在我們的非住宅建築業務中，我們繼續看到新的活動。在其他類型的專案中，我們做一些較小的項目，這些項目對我們來說仍然很活躍。我們並不是說它在成長，但它也沒有下降。我們在該領域銷售產品的管理團隊對這些市場的前景非常有信心和樂觀。當然，資料中心在那裡具有強大的吸引力。Reliance 銷售的產品範圍十分廣泛，我們銷售的產品不僅限於資料中心建築的基礎建設。我們有很多不同的產品，它們也進入資料中心內部並實現電氣化。

So that's a bright -- a real bright spot out there. But overall you know schools, hospitals, airports, we continue to see a lot of activity in that space.

所以，這是一個光明──一個真正的光明點。但總體而言，你知道學校、醫院、機場，我們繼續看到這些領域的大量活動。

Okay. Within the aero -- commercial aero supply chain, I believe you noted an inventory overhang. Is there more detail that you can share there or expected duration around the issue?

好的。在航空 - 商用航空供應鏈中，我相信您注意到了庫存過剩。您能否分享更多細節或有關該問題的預計持續時間？

Yeah. I mean, I wish we had a perfect answer to that, Martin. We have to watch what happens in the space. But we are seeing you know some products where it appears the supply chain has worked through and there's some activity -- buying activity from our customers buying from us. But at a fairly moderate level at this point, I do believe Boeing's build rates did increase recently. So once that starts to flow through the supply chain, we do anticipate seeing more activity levels, but our guide for Q3 was pretty flat with what we saw in Q2.

是的。我的意思是，我希望我們對此有一個完美的答案，馬丁。我們必須觀察太空中發生的一切。但我們看到，有些產品的供應鏈似乎已經運作起來，並且有一些活動——來自我們客戶的購買活動。但目前處於相當溫和的水平，我確實相信波音的製造率最近確實有所增加。因此，一旦開始在供應鏈中流動，我們確實預計會看到更多的活動水平，但我們對第三季的指導與第二季的情況基本上持平。

Katja Jancic, BMO Capital Markets

Katja Jancic，BMO資本市場

Hi, thank you for taking my questions. Maybe starting on the market share gains. Can you talk a bit about what gives you the ability to really gain market share and how are you thinking about over the next few quarters? Is this expected to continue?

你好，謝謝你回答我的問題。也許從市場佔有率的成長開始。您能否談談是什麼讓您能夠真正獲得市場份額以及您對未來幾季有何打算？這種情況預計會持續下去嗎？

Hi Katja, so if you go back a few quarters, even through most of last year, we have been picking up market share. The important thing for us, we talk about smart profitable growth. Means we're picking up market share but also maintaining our gross profit margin. So you know we're not just chasing business out there, we're going after good business. And we think there is room to continue to do that. I think the Reliance teams win that new business because of the superior customer service that our people provide to our customers, especially in uncertain markets where customers want to buy more frequently. Our next day delivery model, the level of processing that we can provide to our customer, the quality of our products, I think that high-touch customer service model is -- and the way that we're structured, decentralized so our people can react quickly to opportunities that they see in the market, and really focus on those customer relationships with our broad footprint. I think those are all positives that allow us to gain that market share.

你好，Katja，如果回顧幾個季度，甚至是去年的大部分時間，我們的市場份額一直在上升。對我們來說，重要的是談論智能獲利成長。這意味著我們正在擴大市場份額，同時保持我們的毛利率。所以你知道我們不只是在追逐生意，我們還在追求好的生意。我們認為還有繼續這樣做的空間。我認為 Reliance 團隊之所以贏得這項新業務，是因為我們的員工為客戶提供了卓越的客戶服務，尤其是在客戶希望更頻繁購買的不確定市場中。我們的隔天送達模式、我們可以為客戶提供的處理水平、我們的產品質量，我認為高接觸客戶服務模式是——以及我們的結構方式、分散方式，以便我們的員工可以對他們在市場上看到的機會做出快速反應，並真正專注於我們廣泛覆蓋範圍內的客戶關係。我認為這些都是讓我們獲得市場份額的正面因素。

Then there's a lot of uncertainty still right now in the market. Does this increase the potential acquisition opportunities? Is there more potential deals that are coming to the market? And how did the valuation look?

目前市場仍存在許多不確定性。這是否會增加潛在的收購機會？市場上是否還有更多潛在交易？估值如何？

We have seen an increase in in Q2 over Q1. We had talked, I think starting last year going into the presidential election that we had seen some pullback and acquisition activity which we attributed to uncertainty around that and then with all the trade uncertainty that had continued. But in Q2, we did see an uptick in number of deals in the market. So we're pleased to see that. Oftentimes, if there's uncertainty and owners of companies, they don't think they'll get the valuation they would like to so they pull back.

我們看到第二季度比第一季有所成長。我們曾經討論過，我認為從去年總統大選開始，我們就看到了一些回調和收購活動，我們將其歸因於周圍的不確定性，以及持續存在的貿易不確定性。但在第二季度，我們確實看到市場交易數量增加。所以我們很高興看到這一點。通常，如果存在不確定性，公司所有者認為他們無法獲得他們想要的估值，因此他們就會退出。

But I think, for whatever reason, we're seeing more of them come to market at this time. Sometimes, people don't get tired of the uncertainty and if they're near retirement age, they may choose to exit. So we're pleased to see that increased activity from an evaluation standpoint. For the most part we believe that seller expectations more closely align, at least with you know the way we at Reliance look at some of the opportunities. But there are still some deals out there where valuation expectations are still higher than our view going forward. But we're you know we're pleased to see more opportunities for us to look at. We continue to actively look at those opportunities. And if and when we find the good companies that are the right fit, we believe for Reliance of the right value, we're excited to execute on those opportunities.

但我認為，無論出於什麼原因，我們都會看見更多這樣的產品進入市場。有時，人們不會厭倦不確定性，如果他們接近退休年齡，他們可能會選擇退出。因此，從評估的角度來看，我們很高興看到活動的增加。在大多數情況下，我們相信賣家的期望更加一致，至少與您知道我們 Reliance 看待某些機會的方式更加一致。但仍有部分交易的估值預期高於我們對未來的預期。但我們很高興看到我們有更多的機會可以考慮。我們將繼續積極尋找這些機會。如果我們找到合適的優秀公司，我們相信 Reliance 具有正確的價值，我們很高興能抓住這些機會。

Thank you.

謝謝。

Thanks, Katja.

謝謝，卡佳。

Mike Harris, Goldman Sachs.

高盛的麥克·哈里斯。

Yeah, thanks. Good morning, guys (inaudible) for taking the question here, just (technical difficulty) Karla, follow up on the earlier question around the gross margin of pressure in the third quarter. It sounded like, and I wanted to make sure that I understood what you said that you guys were being conservative based on the second quarter results. And so I'm just curious. I mean, based on your current visibility, and I'm you know not asking for a guide beyond the third quarter. But if you had guide, do you have the visibility that you would have confidence to speak to -- margin I'm trying to get a sense of whether or not this pressure is limited to perhaps the third quarter or could it extend beyond that?

是的，謝謝。早安，大家（聽不清楚）在這裡回答這個問題，只是（技術難題）卡拉，繼續回答先前關於第三季毛利率壓力的問題。聽起來，我想確保我理解了你所說的，你們根據第二季的結果採取了保守的態度。所以我只是好奇。我的意思是，根據您目前的知名度，我不會要求提供第三季之後的指南。但是如果您有指南，您是否具有可以自信地談論的可見性 - 保證金我試圖了解這種壓力是否僅限於第三季度或者是否會延續到第三季度之後？

Yeah. Hi, Mike, it it's hard to answer. We hope we're being conservative, but with our model we won't know until we get there. But again, we do think the environment was a bit unique in Q2 and with the trade uncertainty continues to potentially be a bit unique in Q3.

是的。嗨，麥克，這個問題很難回答。我們希望我們是保守的，但是對於我們的模型，我們只會到達那裡才會知道。但我們確實認為第二季的環境有點獨特，而且由於貿易不確定性，第三季的環境可能仍然有點獨特。

The tariffs and the unknown around the tariffs gave our suppliers an opportunity to increase prices on some products. But on the other side, our customers also were facing that uncertainty and so we're holding back on buying. So our you know more normal pattern of being able to pass through those price increases at time of announcement was not as successful as it has been in some prior periods. I think you know our customers, again, are still uncertain, and if they can hold back on buying, they were. So it was a little more difficult that even though the mills made some price announcements to get the market to accept those. And that's why we think once there is more certainty and we get the tariffs, the trade unknowns behind us, and the -- our people in the field feel very confident about their ability to get in the market, the strength of their customers.

關稅以及圍繞關稅的未知因素為我們的供應商提供了提高部分產品價格的機會。但另一方面，我們的客戶也面臨這種不確定性，因此我們暫緩購買。因此，我們在宣佈時能夠透過這些價格上漲的更正常模式並不像之前某些時期那樣成功。我想你知道我們的客戶仍然不確定，他們是否能夠忍住不購買，他們就是這樣的。因此，儘管工廠發布了一些價格公告，但要讓市場接受這些價格還是有點困難。這就是為什麼我們認為，一旦有了更多的確定性，我們解決了關稅問題，解決了貿易未知數，我們現場的工作人員就會對他們進入市場的能力和客戶的實力充滿信心。

So we believe it's temporary and we want to get back to our more normal pattern. But -- and I think also in Q2, again March, April, no price increases costs going up. And then they -- we saw the pressure and prices started to come down May and June. But also supplier lead time shortened so we were getting the higher cost metal more quickly. So we're working through that in Q2 and Q3. And again, as I mentioned earlier, we are positive on the price increases on aluminum and stainless flowing through and holding. It just takes a little time to get those in which we expect to happen through Q3.

所以我們相信這只是暫時的，我們希望能恢復到更正常的模式。但是 — — 而且我認為在第二季度，也就是三月、四月，價格不會上漲，成本也不會上升。然後他們——我們看到壓力，價格在五月和六月開始下降。而且供應商的交貨時間也縮短了，因此我們可以更快地獲得更高成本的金屬。因此，我們將在第二季和第三季解決這個問題。正如我之前提到的，我們對鋁和不銹鋼價格上漲和維持持樂觀態度。我們預計第三季將實現這些目標，但這只是需要一點時間。

Okay thanks that was helpful. And then I guess just one more here. It looks like you guys have continued to gain meaningful market share versus the field. And I was just wondering if, perhaps, you could share your thoughts on as we look forward, what does that pace look like and maybe speak to the sustainability of the games going forward?

好的，謝謝，這很有幫助。我想這裡還剩一個。看起來你們在該領域繼續獲得了可觀的市場份額。我只是想知道，您是否可以分享我們展望未來的想法，這種節奏是什麼樣的，或許可以談談未來奧運的可持續性？

Yeah. I mean we think that they are sustainable, Mike. Again, as I mentioned in the prior comments, Reliance has always prided ourselves. We don't pride ourselves here at corporate, it's prides based on what our people out in the field are able to do every day in servicing our customers. And we think that model allows them to win the new business that it will continue to allow them to grow that business. And we referred to our smart profitable growth initiative, so we are from a corporate level. Over the last couple of years, we have been setting targets with our teams, incentivizing them to grow their volume.

是的。我的意思是我們認為它們是可持續的，麥克。再次，正如我在之前的評論中提到的，Reliance 一直為自己感到自豪。我們並不以公司為榮，我們自豪的是我們的員工每天在現場為客戶提供的服務。我們認為這種模式可以讓他們贏得新業務，並將繼續幫助他們發展業務。我們提到了智慧獲利成長計劃，所以我們是從公司層面出發的。在過去的幾年裡，我們一直在為我們的團隊設定目標，激勵他們提高產量。

There were -- there was a period of years where our volumes were actually declining at Reliance. And we're pushing our teams to grow their volumes, we've invested a lot in value-added processing, equipment, and facilities, and we want to you know get better utilization out of all of those investments. Ao it is a push from us. But it's a balanced push that they also have to maintain our sustainable gross profit margin range of 29% to 31% and hopefully grow that as we move into the future. But also, grow their tonnes, which is helping us from an operating leverage standpoint as well as we push more tonnes through our investments.

有幾年，Reliance 的業務量實際上一直在下降。我們正在推動我們的團隊擴大產量，我們在增值加工、設備和設施方面投入了大量資金，我們希望能更好地利用所有這些投資。這是我們的一個推動力。但這是一個平衡的推動，他們還必須保持我們可持續的毛利率範圍 29% 至 31%，並希望在未來實現成長。而且，他們的產量也在增加，這從經營槓桿的角度對我們有幫助，我們也可以透過投資來增加產量。

Okay. Thanks a lot. I'll get back in queue.

好的。多謝。我會回到隊列中。

Thanks.

謝謝。

Alex Hacking, Citi.

花旗銀行的亞歷克斯‧哈金 (Alex Hacking)。

Yeah thanks morning I just have one question, which was on the aluminum business. Domestic US aluminum prices are up 30%, 40% this year, I think, with the Midwest premium at $0.70. Your shipments still seem pretty robust, but how are you seeing acceptance of these significantly higher prices with your customers? Thanks.

是的，謝謝早上好，我只有一個問題，關於鋁業務。我認為，今年美國國內鋁價上漲了30%到40%，中西部地區的溢價為0.70美元。你們的出貨量似乎仍然相當強勁，但你們如何看待客戶對如此大幅上漲的價格的接受度？謝謝。

Thanks, Alex. Steve, do you want to address [that]?

謝謝，亞歷克斯。史蒂夫，你想談談[那]？

Yeah, it’s Alex. The aluminum prices have gone up fast and furious and then leveled off a little bit in the second quarter.

是的，他是亞歷克斯。鋁價快速上漲，但在第二季有所回落。

We are passing along the increases to our customers, and we're being aware of their businesses. They are accepting the increases, but the level whether it's stainless or aluminum. They've been rather outsized from the -- our mill suppliers, and we think that it's a matter of timing. And as the year goes on, they'll be pushing the market more and more.

我們正在將成長的費用轉嫁給我們的客戶，我們了解他們的業務。他們接受價格上漲，但無論是不銹鋼還是鋁的價格水平都一樣。他們與我們的工廠供應商相比規模相當大，我們認為這只是時間問題。隨著時間的推移，他們會進一步推動市場的發展。

Yeah. And Alex, I would just add -- at Reliance whether it's in different periods, there's been maybe more of a highlight on nickel surcharges or the aluminum, the Midwest premium. We really look at our cost that on as an all-in cost. And that's how we go to market and base our average our sell prices on the all-in cost. So we're treating the Midwest premium the same.

是的。亞歷克斯，我只想補充一點——在 Reliance，無論是在不同的時期，可能更關注的是鎳附加費或鋁以及中西部地區的溢價。我們確實將我們的成本視為全部成本。這就是我們進入市場並根據總成本確定平均售價的方式。因此，我們對中西部地區的保費也採取同樣的態度。

I guess, just to follow up. I mean. Are you seeing customers at all sitting back saying I want to wait for a trade deal with Canada to see where the Section 232 ends up before I pay a $0.70 Midwest premium or does the business requirements effectively just compel them to keep buying even at these prices?

我想，只是為了跟進。我是說。您是否看到客戶坐下來說我想等待與加拿大達成貿易協議，看看第 232 條的結果，然後再支付 0.70 美元的中西部溢價，還是業務要求實際上迫使他們繼續購買即使在這些價格下？

I mean, Alex, our customers who are purchasing aluminum for manufacturing whoever the end use is, they're going to be paying a higher price. They may just buy a little bit less and a little more frequently, which is what benefits our model of next-day delivery for the most part and having a bread of inventory all over the country.

我的意思是，亞歷克斯，我們購買鋁用於製造的客戶無論最終用途是什麼，他們都會支付更高的價格。他們可能只是購買量稍微少一點，但購買頻率稍微高一點，這對我們隔天送達的模式以及在全國各地擁有大量庫存大有裨益。

So it is a little bit shocking in some cases for them. But I think that this uncertainty with tariffs and higher prices will affect -- will benefit Reliance.

因此在某些情況下這對他們來說有點令人震驚。但我認為關稅和價格上漲的不確定性將會影響——將使 Reliance 受益。

Okay, thanks so much.

好的，非常感謝。

Thank you.

謝謝。

We've reached the end of our question-and-answer-session. I'd like to turn the floor back over if you need to further closing comments.

我們的問答環節已經結束。如果您需要進一步的結束語，我希望再次發言。

All right. Thank you, operator. And thanks again to all of you for joining our call today and for your continued support of Reliance. We'd also like to thank the entire Reliance team for staying safe, operating safely every day, and continuing to service our customers at the highest level. And as we mentioned in our comments, we are confident in Reliance's continued ability to perform well in all markets. We'll get through this temporary uncertainty here and come out of that very strong.

好的。謝謝您，接線生。再次感謝大家今天參加我們的電話會議並感謝你們對 Reliance 的持續支持。我們也要感謝整個 Reliance 團隊保持安全、每天安全運作並繼續為我們的客戶提供最高水準的服務。正如我們在評論中提到的那樣，我們對 Reliance 在所有市場繼續表現良好充滿信心。我們將度過這個暫時的不確定性，並變得非常強大。

Before we end the call, I'd like to update everyone that in August, we will be participating in Seaport Research Partners Annual Summer Investor Conference. And in early September, we'll be participating in the Jefferies Industrials Conference in New York City, and we hope to meet with many of you there. Thank you, and goodbye.

在我們結束通話之前，我想向大家通報一下，八月我們將參加 Seaport Research Partners 年度夏季投資者會議。九月初，我們將參加在紐約舉行的傑富瑞工業會議，我們希望在那裡與你們中的許多人見面。謝謝，再見。

Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議到此結束。此時您可以斷開線路並享受美好的一天。我們感謝您今天的參與。