Olympic Steel Inc (ZEUS) 2021 Q3 法說會逐字稿

Good morning, and welcome to Olympic Steel 2021 Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

At this time, I'd like to turn the conference over to Rich Manson, Chief Financial Officer at Olympic Steel. Please go ahead, sir.

Thank you, operator. Welcome to Olympic Steel's earnings call for the third quarter of 2021. Our call this morning will be hosted by our Chief Executive Officer, Rick Marabito; and we will also have our President and Chief Operating Officer, Andrew Greiff.

Before we begin, I have a few reminders. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and may not reflect actual results. The company does not undertake to update such statements, changes in assumptions or changes in other factors affecting such forward-looking statements. Important assumptions, risks, uncertainties and other factors that could cause actual results to differ materially are set forth in the company's reports on Forms 10-K and 10-Q and the press releases filed with the Securities and Exchange Commission.

During today's discussion, we may refer to adjusted net income per diluted share, EBITDA and adjusted EBITDA, which are all non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is provided in the press release that was issued last night and can be found on our website. Today's live broadcast will be archived and available for replay on Olympic Steel's website.

At this time, I'll turn the call over to Rick.

Thank you, Rich. And good morning, everyone, and thank you for joining us to discuss Olympic Steel's record results for the third quarter of 2021. I'll begin with some comments about our very busy and successful quarter, including exciting progress on our long-term strategy. Then, Andrew will review our business segments together with commentary about our end markets. And then, after that, Rich will provide a more detailed look at our third quarter financial results. And of course, as always, we'll wrap up and take your questions.

The third quarter was phenomenal in many ways, and we are proud of the entire Olympic Steel team for their outstanding execution. Not only did we achieve record-setting financial results, but we also continue to successfully execute our long-term strategy to further diversify our business, deliver consistent profitability and enhance shareholder value.

Highlights of the quarter, included the exceptional performance of all 3 of our business segments, the continued success of our recent acquisitions, which have contributed to our profitable growth and the mid-September sale of our Detroit operation, which was primarily focused on processing and distributing carbon flat-rolled products to domestic automakers.

Then 2 weeks after the Detroit sale on October 1st, we used a portion of the Detroit sale proceeds to acquire Shaw Stainless and Alloy, a stainless steel distributor, fabricator and end-product manufacturer. The Shaw acquisition further expands our specialty metals, geographic footprint and our product and processing capabilities, while allowing us to immediately replace the former Detroit earnings stream at a fraction of the investment. We believe this back-to-back sale and acquisition transaction is a meaningful demonstration of our strategic execution to build higher sustainable returns for our shareholders.

Next, I do want to comment on our safety performance. And we are proud that this year, 18 of our locations received Safety Awards from the Fabricators and Manufacturers Association, including 12 that received the highest Safety Award of honor for having a perfect safety record and no recordable injuries or illnesses in the prior year. These awards reflect our employees' commitment to a strong safety culture and their dedication to keeping each other healthy and safe.

Turning now to the financial results. As noted in our release, our third quarter performance was the strongest quarter in company history. And in fact, it was better than all but 3 full years in Olympic Steel's history. Net sales totaled $668 million. Net income was $44.5 million and adjusted EBITDA was $70.5 million, all of which significantly exceeded our previous all-time best quarter, which was the second quarter of this year.

These strong results were driven by our continued discipline around controlling expenses and tightly managing working capital and inventory levels, combined with accretive acquisitions and robust market demand and metals pricing. As I previously mentioned, we are excited to further diversify and expand in the higher return Specialty Metals businesses with the recent acquisition of Shaw Stainless. This transaction marks our fifth acquisition in 4 years, and Shaw is a perfect fit for Olympic. It's immediately accretive, it's well-run and dedicated to exceptional customer service with strong core values and really excellent growth opportunities.

In addition to acquisition growth, we continue to invest in internal initiatives, such as automation to help solve labor challenges, improve safety and build additional efficiency into our operations. We also remain laser-focused on managing our costs and inventory levels. All of these actions support our continued pursuit of higher returns in each of our 3 business segments.

Looking forward, we anticipate that market demand will remain steady in the fourth quarter and heading into 2022. We are well positioned to finish our record 2021 on a strong note, and we remain optimistic about 2022.

So with that, now I'll turn the call over to Andrew, for some additional comments.

Thank you, Rick. And good morning, everybody. This record-breaking quarter was the result of a collective effort by everyone at Olympic Steel to focus on controlling what we can control: safety, our customers and vendor relationships and our operating expense in working capital disciplines. We continue to perform for our customers under positive but challenging business conditions, including inflationary pressure, difficulties in attracting and retaining skilled labor and other supply chain disruptions. I'd like to congratulate our segment teams as all 3 reported record EBITDA and pretax results. This is a great achievement.

And as Rick highlighted, we delivered this exceptional performance while continuing our focus to enhance profitability as reflected by the sale of our Detroit division, which historically counted for approximately 8% of our flat-rolled volume, mainly concentrated in carbon flat products and the acquisition of Shaw Stainless. Shaw located just outside of Atlanta, Georgia is a full line distributor of stainless steel sheet, pipe valves, fittings, tube, bar and angles.

The distribution business focuses on small quantity sales at returns that are higher than our traditional specialty metals returns, much like our acquisition of action last year. The company also manufactures and distributes stainless steel bollards and water treatment systems. It will continue to be led by existing management, including Bryan Shaw, the previous owner. We welcome Bryan and the Shaw team and look forward to a successful integration as we work together to advance our long-term strategy.

Shaw Stainless will report to Zach Siegal, our Vice President of Strategic Development, and the results will be included in our Specialty Metals segment. The addition of Shaw Stainless continues our strategic growth into metal intensive end-use products, building on the success we have experienced with both our Wright self-dumping hoppers and EZ Dumper truck inserts. As with all of our previous acquisitions, we expect to realize commercial synergies that will advance our efforts to produce consistently strong earnings and shareholder returns.

Under the leadership of Andy Markowitz, Specialty Metals had another strong quarter as favorable market conditions continued, and the segment reported its third straight quarter of record EBITDA at $25.5 million. We continue to outpace the industry with stainless shipments, up 43.4% over last year compared with 20.1% for the industry as a whole and aluminum shipments up 52.4% compared with 24.2% for the industry. The record quarter included significant contributions from the recent acquisitions of Berlin Metals and Action Stainless. Shaw will be a great complement to the Specialty Metals segment.

Our pipe and tube division, led by Will Zielinski, also set a record with $10.6 million of adjusted EBITDA. Our backlog in this segment is strong, both in distribution and fabrication, and we believe that our continued focus on turning inventory will lead to a strong fourth quarter.

As well, our carbon segment had an extraordinary quarter, contributing $39.9 million of adjusted EBITDA as we continue to focus on operating expenses and inventory turnover. We saw significant contributions from all our divisions. In particular, I want to highlight the great success of our investments in the Southeast.

We enhanced our fabricating capabilities in our new facility in Buford, Georgia, while our automotive stamping line in Winder, Georgia, has helped us to profitably grow our position with transplant automakers in the South. Based on these successes, we will be adding a second automotive stamping line in Winder, which is expected to be fully operational in the second quarter of 2022, along with adding automated welding cells in our Buford facility.

Overall, end-user demand was steady throughout the third quarter, with the majority of our OEMs reporting to be very busy with backlogs well into 2022. Overall, our fourth quarter shipments are expected to remain steady, subject to the typical seasonal trends experienced each year during the holidays. As we look forward to the fourth quarter by segment, we expected continued strength in specialty metals volume and pricing as mill supply of stainless and aluminum remains constrained. We do see headwinds in carbon pricing in the quarters ahead.

We have remained diligent in turning our inventory at historically high levels in order to reduce our exposure to devaluation risk. While we do expect carbon pricing to soften, we are optimistic that end-user demand remains strong, and the current supply chain constraints may serve to prolong a favorable demand environment in 2022.

Pipe and tube pricing tends to lag carbon flat pricing by 1 to 2 quarters. We expect the pipe and tube segment to finish out 2021 strong but expect the segment to face some pricing headwinds into 2022 on their carbon-based products. The actions we have taken have positioned us well for the fourth quarter and beyond. We will continue to pursue the right mix of acquisitions and organic growth, and we will remain vigilant when it comes to safety, expenses and inventory, focusing on what we can control. I am proud of our leadership, our support staff and all Olympic team members for the way they have continued to drive us forward.

Now, I'll turn the call over to Rich.

Thank you, Andrew. And good morning, everyone. As Rick and Andrew discussed, the third quarter was exceptional. We had record financial results while successfully completing multiple transactions that aligned our growth and capital allocation strategies. On September 17th, we completed the sale of our Detroit division. We initially received $58.4 million of proceeds from the sale.

Additionally, we are finalizing the working capital adjustment which is expected to bring approximately $13 million of cash over the next 3 months, bringing the total expected capital return -- capital return to the company to over $70 million. We recorded a $3.5 million gain on the sale, while selling our accounts receivable and inventory at the height of the market pricing, allowing us to take future carbon pricing risk off the table.

As Rick and Andrew noted, we quickly reinvested a portion of those proceeds in the acquisition of Shaw Stainless and Alloy on October 1st. With the addition of Shaw, we've immediately replaced the EBITDA stream from our Detroit operation at a fraction of the investment. As we realize additional synergies through the integration of Shaw, we expect to further improve our EBITDA returns and the consistency of our earnings. While the initial proceeds from the sale of our Detroit operations was used to reduce debt, fund working capital and purchase Shaw, we anticipate using the remaining proceeds to pursue additional high-return growth opportunities.

Now I'll offer a little more detail on the outstanding financial results. Net income totaled $44.5 million compared with a net loss of $1.5 million in the third quarter of 2020. Adjusted EBITDA was $70.5 million compared with $4.3 million for the third quarter of last year. These results include $7 million of LIFO pre-tax expense in the third quarter of 2021 compared with $100,000 of LIFO pre-tax income in the same period a year ago.

Sales for the quarter totaled $668 million compared with $300 million a year ago. Flat-rolled volumes were up slightly in the third quarter of 2021 versus the second quarter of 2021, despite the sale of Detroit on September 17th. We continued to turn inventories at historically high levels, with flat-rolled inventory turns at 5.6x year-to-date, and pipe and tube inventory turns at 4x year-to-date.

Our total debt increased by $137 million since year-end to $298 million at the end of the third quarter as a result of funding higher working capital levels associated with higher metal prices, partially offset by the initial proceeds from the sale of the Detroit operations. At quarter end, our line of credit availability was approximately $173 million. Currently, our loanable collateral exceeds our credit line size by approximately $120 million, which provides an untapped source of additional capital availability. As pricing plateaus or decreases, we expect to generate significant cash flow as working capital requirements decrease.

Consolidated operating expenses for the third quarter were $85.4 million, an increase of $25.1 million compared with the third quarter a year ago. Included in the increase are $3.7 million of operating expenses associated with our Action Stainless acquisition, a $13.8 million increase in performance-based incentive expenses and increased operating expenses associated with processing and shipping 11% more metal in inflationary pressures on labor and distribution expense.

We had capital expenditures totaling $7.7 million for the first 3 quarters of 2021 compared with depreciation expense of $13.6 million. We anticipate that most of the cash flow associated with the capital expenditures in the Southeast that Andrew outlined earlier will fall into 2022. Our effective income tax rate for the quarter was 26% compared to 27% for the third quarter of last year, and we anticipate the effective rate for the fourth quarter of 2021 to approximate 26% to 27%. We also announced that the Board of Directors approved a regular quarterly cash dividend of $0.02 per share, which is payable on December 15, 2021, to shareholders of record on December 1, 2021.

In conclusion, to echo Rick and Andrew, we had a phenomenal quarter as a company. We delivered strong financial and operational performance and continue to make moves that advance our strategy. In the final months of 2021, we are well positioned to continue taking advantage of the demand strength in our markets, and we look forward to another strong quarter for Olympic Steel.

Now operator, let's open the call for questions.

(Operator Instructions) Our first question comes from Marco Rodriguez with Stonegate Capital Markets.

I'm not sure if I missed this on the call, but I was wondering if maybe you could talk a little bit about what you're seeing as far as lead times and mills are concerned?

Well, on the carbon side of it, we've seen -- this is Andrew, by the way. On carbon, we've seen hot roll come in just a little bit. If you go back a couple of months ago, lead times were in the 5- to 7-week range. And today, they're more like 4.0 to 6.0, cold-rolled and galvanized are a little bit longer than that. And what I would tell you is in stainless and aluminum, they are really stretched. The mills are at least 7 to 8 weeks out. And for both of those products, service centers are on allocation today.

Got it. Very helpful. And I know you made some comments in the prepared remarks. And in terms of some expectations on what these supply chain issues and the expansion of some of the lead times do with pricing in your expectations into next year. But can you maybe expand on some of those comments? And just maybe talk about if you can, what you're hearing from your key suppliers in terms of what their expectations are for industry conditions and how the supply chain issues sort of work their way through over the next 12 months or so?

Sure. Well, I think what we're seeing from the carbon mills is, they've started to catch up on some of the later deliveries. And I think as we come through the fourth quarter, they'll catch up to where they had been previously. So, I think as we come into the beginning of next year, I don't think that metal is going to be as tight as what it was certainly in the first half of '21 and as we came out of the third quarter of this year. What I do think is some of the other supply chain issues are not going to relieve themselves anytime soon, including labor. And I think labor and transportation are going to be the 2 areas that really are going to be the most challenged coming into the beginning of next year.

Yes. And Marco, it's Rick. I think that as we look at supply chain constraints and focus on our customer side, I think that's where we're seeing the bigger impact. We're still seeing customers that have a demand pull and the ability to sell more than they're able to produce, whether they're short on various items of supply or labor or transportation or all the other things that have been talked about. And so that's why we tend to believe that there is a good amount of pent-up demand, and it gives us optimism for next year that will have a pretty steady to strong demand environment.

Got it. Very helpful. And kind of following up on that and just in terms of overall initial conditions. I mean, everything seems to be kind of favorable for you guys right now in terms of pricing, demand from all the reopenings. And obviously, this can't last forever. So, when we're thinking about your overall business strategy, what, if anything -- or can you accelerate to make hay here while the sun is shining?

Well, I think we've been doing that. And I think our results show that. I think we have a saying at Olympic Steel that the things that we can control, let's optimize those. And I think we've actually done a really good job of that, whether it's access to the metal in a very tight supply in specialty metals, whether it's an acute focus on inventory turns, as Andrew talked about, for carbon as we look at carbon pricing peaking right now. We've certainly optimized our customer relationships. And really, I think, done a really good job in a very, very disruptive market over the last 18 months in terms of keeping our customers in supply.

We talked about big market share gains that we've seen in many of our products. So, those are the things that we've done to optimize. And I think going forward, as we look at our different markets, as Andrew commented on, we'll continue to do those things and continue to stick to our disciplines. And I'd tell you, most importantly, we're going to be entering 2022 from a really good position in terms of inventory turnover.

Got it. Very helpful. And then maybe if you can discuss what you're sort of seeing in terms of the M&A landscape, just kind of walk us through perhaps your pipeline? And then what are the valuations sort of look like for you guys?

Yes. So, it's a strong M&A market. Our view is it will continue to be a market where a lot of deals get done. We think 2022 is going to continue that. I think market-wise, you'll continue to see deals getting done here in the fourth quarter. As you know, we've been very active. We commented, we've made 5 acquisitions in 4 years. It's definitely part of our ongoing growth strategy. We intend to be active. We are actively looking and pursuing strategic fits every day. I would anticipate us as moving forward to continue on the same pace that you've seen us on here recently in the last year or 2. And we're also excited about augmenting our growth also through capital expenditures. And Andrew talked a little bit about that. We've got some new equipment that's coming in into the South. We're excited about that. And also looking at continuing to add automation to our equipment suite to continue to make us safer, more efficient, lower cost and be another vehicle for growth in a supply-constrained marketplace.

Our next question is from Alan Weber with Robotti Advisors.

Just a little follow-up on the acquisitions -- when you talk about acquisitions, how do you think about valuation in terms of -- do you look at some multiple of strong 2021 results? Or how do you think about that? I mean, because given the way you guys performed, I assume most of what you're looking at has similar dynamics.

Yes. Thank you, Alan. Thanks for being on the call. Thanks for the question. Yes, we look at valuation in terms of a cycle. We like to look at what the earnings capabilities are of those companies over what we would say would be a normalized steel cycle. I think the multiples, if you apply them over cycle earnings have remained pretty consistent. I think you're right in 2021, certainly, the earnings stream from many companies has accelerated. So, valuation isn't really being done off of a 2021 type of scenario or multiple. That's how we'll continue to look at it.

And then in terms of valuation, we're going to remain disciplined. We apply a pretty strict cost of capital, discounted cash flow model as we look at acquisitions. You've heard us say over the last several years, each of our acquisitions, it's really important that their great cultural fits for us, that they're well-run companies and that they're immediately accretive. So, that's what we're looking for, and we think that there's lots of great companies out there that will be future fits for us.

Okay. And just a separate question. When you look at where you are today, how do you compare the company to say where you were in 2018, which was kind of the last good financial year?

Yes. I think a lot of the things that I talked about a few moments ago, I think we've got some really strong disciplines in place around what I like to call the blocking and tackling the everyday parts of the business around buying, selling, expenses, managing working capital, inventory turns, I think really just some strong, strong disciplines in place that will serve us well going forward. I think our continued diversity where we're getting really nice balance and a lot of the products that we sell, both within some of the segments. And then obviously, the balance of the segment.

So you've seen some acquisition growth in terms of the Specialty Metals business recently. But you're also seeing growth in the Carbon business down south. And we also like our changing mix even within the Carbon business. I think we've seen some nice growth in the coated and cold-rolled ends of the marketplace. Some good geographic expansion, as I said, into the Southeast. So, yes, we feel like we are a stronger, more disciplined, more diversified company that will allow us to produce more consistent and higher returns as we move forward. We're confident in that.

And I guess my last question was, excluding acquisitions, I think you talked about gaining market share. Where is that market share coming from?

Well, I think we've just seen it through the diversification. I mean, certainly, the customers that we have gone after the last couple of years in all of our segments, we've just seen some great growth in those areas. In our Carbon business, we continue to be very strong in the industrial OEMs, that part of the business has done very well for us in our white metal side of it, the stainless and aluminum, our growth in the truck trailer industry, food equipment and appliance has done very well. And we've been able to break into some of the industrial sides of that as well. And so, I think those are really the areas, aluminum, in particular, we really have been able to see some great growth. And so, I think those are the keys for us and will continue to be as we head into next year.

No, I may have missed it. Did you include a cash flow statement in the earnings release?

Alan, it's Rich. No. There's no cash flow in the earnings statement, but the 10-Q will be filed later this afternoon, and you'll have the full financials in there.

And so, just curious, is it your expectation that for next year it should be a significant generator of cash?

Yes. I think that it’s even going to -- I wouldn't say significant generator in the fourth quarter, but I already kind of see the tide turning that I think you'll see some small cash flow here in the fourth quarter. And I do believe that as pricing plateaus or decreases, that the draw on working capital will be less, and we will generate significant cash flow next year.

Yes. It's one of the -- it's really one of the strong principles of our business. The countercyclicality in terms of the cash flow. So, you've seen really, really strong earnings out of the company here at the last multiple quarters with a build in working capital due to the quickly rising prices. As prices even plateau, like they're doing now on carbon. And then, if you look at sort of some of the future curve pricing points, we will generate a lot of cash flow going forward. 2022 should be a very, very strong year for cash flow.

Our next question is from Phil Gibbs with KeyBanc Capital Markets.

The net working capital in the fourth quarter, did I hear you just say from the last questioner that, that's going to be a very modest build? Is that the way to think about it?

Well, no, Phil, I think it's actually -- I think that, yes, you're going to see working capital demands decrease in the fourth quarter. Traditionally, you've got less effective shipping days due to the holidays. And so typically, your accounts receivable come down to their lowest point at year-end, and cash kind of trails up. But I do think that cash flow will be generated in the fourth quarter to some extent, but the bulk of that coming in 2022.

Okay. I was just trying to balance that with the inflation and kind of the lagging inputs and when that starts to go the other way. If you understand my question.

Yes. I think, as Rich said, probably the beginning part of the fourth quarter, we still have a little bit of a pull on working capital. But I think as we hit the midpoint and then go to the back half of the year, we'll start to generate cash. And then, Rich is exactly right as we hit first quarter, our anticipation is we'll be generating a lot of cash flow, free cash flow.

Yes. I agree with that. And then on the automotive side, what's the exposure there after all the moves that you've made with the Detroit piece pushing out? And I know, you've got some upgrades in the South as you talked about, obviously, made a little acquisition here in the fourth quarter. So what's the exposure there? And what are you guys seeing?

Well, I think with the sale of the Detroit facility, it will mitigate what we're doing with some of the domestic automotive manufacturers, Phil. And I think what we're doing down south is primarily focused on some of the transplants. And so, it's a different model that we're doing down south. Our automotive stamping presses, while we do that and when we did that in Detroit, will be a focus, at least to start, we have our first stamping press which has been very successful. Our second will be operational, we hope, by the end of the first quarter of '22. And then, we'll see from there where our next investments will go. But we're bullish on the automotive business. We like the business that we're doing down south.

Yes. And maybe to just -- if you didn't pick up in Andrew's comments, our prepared remarks, and you know, Phil, we've historically been, I'd call it, 8% to 10% of our business in terms of volume sold has been automotive. Andrew talked about the Detroit sale, that was about an 8% piece of the tonnage sold. So obviously, that went away. But I'd anticipate going forward right now, we're probably a couple of percentage points of our total mix will be automotive, just to put some numbers around the commentary.

Okay. So it’s certainly much smaller, it sounds like the -- on the labor front, I know there's obviously pressure as you guys mentioned that. But do you need to do some hiring? Because it sounds like you're reasonably constructive on the outlook for next year in terms of continued growth in volume. And certainly, the PMIs and the order books would all suggest that that's the case as well. So, where do you stand on hiring efforts?

Yes. So I'd say like everybody in the manufacturing universe in the United States. labor's tough to come by. We do have openings. Like many, we -- our people are doing a phenomenal job, our production workers. They're working probably a little more over time than they were, certainly last year. So we do have openings. We're in a good spot. Our labor is not affecting our ability to service our customers. So we're still doing that flawlessly. But it's certainly on the radar. It's why we've talked about things like, as we continue to look and invest in new equipment, how we can add automation to that equipment. So as we continue to grow, we think that will alleviate some of the pressure in terms of labor. But I think we're in the same boat as everybody, but the good news is it's -- labor is not today, constraining our ability to service our customers.

(Operator Instructions) Our next question comes from Chris Sakai with Singular Research.

I've got a question, sort of a broad question. Rick, how do you guys feel about Biden's recent rollback of the European tariffs on steel and aluminum? And how will that affect Olympic steel?

That's a great question, Chris. This is Andrew. So there's a lot of information that's still going to be coming out. In particular, when things will start and how it's going to be monitored. I mean, at the moment, where they're talking about a quota system, and I think that there'll be a lot of work that's going to have to be done. But from an overall basis, I would expect that imports certainly will increase coming in from Europe, both on the steel and on the aluminum side. I'll tell you right now, Europe is very strong in stainless and aluminum.

So while we will see some more material coming in, it's not going to flood the shores of the U.S. because Europe is very strong in those areas. I think in carbon, in particular, in hot roll, we'll probably start seeing some offshore opportunities in the next week or 2 that will start coming in sometime mid- to late first quarter. And so, I think there'll certainly be some pressures on metal that will be certainly coming in on the coast.

Okay. Great. And then for Shaw, what segment are they going to be reporting in?

Chris, it's Rich. They'll be reporting up through the Specialty Metals segment.

Okay. Great. And then you mentioned, you guys sold the Detroit facility to buy Shaw. And then you've got some extra cash left over for more acquisitions. Can you give an idea about sort of how much is left for new acquisitions?

Yes. So Chris, it's Rick. So just a slightly nuanced piece of the messaging in terms of how you asked the question. We didn't necessarily sell Detroit to acquire Shaw. We had the capability to acquire Shaw without selling Detroit. So, our ability going forward, Rich talked about a strong balance sheet and a lot of availability. So, we're north of $170 million of availability on our asset based loan. He also talked about. We have suppressed availability or actually collateral that would allow us if we wanted to upsize our agreement size, another $120 million or $130 million. What was the exact number?

Yes, $120 million.

Yes, $120 million. So, Chris, we have plenty of capital available to execute on our strategy. And I think you'll continue to see us do just that.

We have reached the end of the question-and-answer session. I would now like to turn the call back over to Rick Marabito for closing comments.

Well, thank you, everybody, for joining us on our call today. We certainly appreciate your continued interest in Olympic Steel, and we look forward to speaking with you again soon. Thank you. Have a great day.

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.