Olympic Steel Inc (ZEUS) 2022 Q2 法說會逐字稿

Greetings, and welcome to the Olympic Steel 2022 Second Quarter Financial Results. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎收看Olympic Steel 2022 第二季度財務業績。 （操作員說明）作為提醒，本次會議正在錄製中。

I would now like to turn the conference over to your host, Rich Manson, Chief Financial Officer at Olympic Steel. Thank you. You may begin.

我現在想將會議轉交給您的東道主，Olympic Steel 的首席財務官 Rich Manson。謝謝你。你可以開始了。

Thank you, operator. Welcome to Olympic Steel's earnings call for the second quarter of 2022. Our call this morning will be hosted by our Chief Executive Officer, Rick Marabito; and we will also be joined by our President and Chief Operating Officer, Andrew Greiff.

謝謝你，接線員。歡迎參加Olympic Steel 2022 年第二季度的財報電話會議。我們今天上午的電話會議將由我們的首席執行官Rick Marabito 主持；我們的總裁兼首席運營官 Andrew Greiff 也將加入我們的行列。

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.

在我們開始之前，我有一些提醒。在今天的電話會議上發表的一些聲明將是預測性的，旨在根據 1995 年《私人證券訴訟改革法案》的安全港條款做出前瞻性聲明，可能無法反映實際結果。公司不承諾更新此類陳述、假設變化或影響此類前瞻性陳述的其他因素的變化。

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 in 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 financial measures 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 the Olympic Steel's website.

可能導致實際結果出現重大差異的重要假設、風險、不確定性和其他因素載於公司關於 10-K 和 10-Q 表格的報告以及提交給證券交易委員會的新聞稿中。在今天的討論中，我們可能會參考調整後的每股攤薄淨收益、EBITDA 和調整後的 EBITDA，這些都是非公認會計原則的財務指標。昨晚發布的新聞稿中提供了這些非公認會計原則措施與最直接可比的公認會計原則財務措施的對賬，可在我們的網站上找到。今天的直播將被存檔並在Olympic Steel的網站上進行重播。

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

這個時候，我會把電話轉給 Rick。

Well, thank you, Rich, and good morning, everyone. Thank you for joining us on today's conference call to discuss Olympic Steel's results for the second quarter of 2022. I'll begin with some comments about the overall quarter, which was exceptional. Then I'll turn it over to Andrew, and he'll review highlights for each of our business segments. And he will also provide some comments on market outlook and some of the investments that we're making to grow our business. Following that, Rich will discuss our second quarter financial results in more detail. And then as always, we'll take your questions.

好吧，謝謝你，Rich，大家早上好。感謝您參加今天的電話會議，討論奧林匹克鋼鐵公司 2022 年第二季度的業績。我將首先對整個季度進行一些評論，這是非常出色的。然後我將把它交給安德魯，他將回顧我們每個業務部門的亮點。他還將就市場前景和我們為發展業務所做的一些投資提供一些評論。之後，Rich 將更詳細地討論我們第二季度的財務業績。然後像往常一樣，我們會回答你的問題。

It was another record breaking quarter for Olympic Steel. We grew net sales to $709 million, an all-time quarterly sales record for the company, surpassing our previous record of $696 million, which just happened to be in the first quarter of this year. This incredibly strong sales performance helped us to deliver our second most profitable quarter ever with EBITDA of $58.8 million. All 3 of our business segments performed exceptionally well. Specialty Metals set new quarterly sales and earnings records. Pipe and Tube continued its run of strong results, and our Carbon segment delivered strong EBITDA of $18.3 million while navigating unprecedented pricing headwinds, which we'll discuss later in the call.

這是Olympic Steel的又一個創紀錄的季度。我們的淨銷售額增長到 7.09 億美元，創下公司季度銷售額的歷史新高，超過了我們之前的 6.96 億美元記錄，而這恰好發生在今年第一季度。這種令人難以置信的強勁銷售業績幫助我們以 5880 萬美元的 EBITDA 實現了有史以來第二個最賺錢的季度。我們所有三個業務部門的表現都非常出色。特種金屬創造了新的季度銷售和收益記錄。 Pipe and Tube 繼續取得強勁的業績，我們的碳業務部門實現了 1830 萬美元的強勁 EBITDA，同時克服了前所未有的定價逆風，我們將在電話會議後面討論。

It was another phenomenal quarter for Olympic Steel. And I would like to commend our team for their focus on executing on our strategy. Our success is rooted in the expansion of our business to higher return, value-added products and processing, combined with our disciplined approach to working capital, expense management and capital deployment. Our strategic actions have strengthened the Olympic Steel's product portfolio, resulting in increasing and more consistent profitability in all market cycles.

對於奧林匹克鋼鐵公司來說，這是另一個非凡的季度。我要讚揚我們的團隊專注於執行我們的戰略。我們的成功源於我們將業務擴展到更高的回報、增值產品和加工，以及我們對營運資金、費用管理和資本部署的嚴格方法。我們的戰略行動加強了Olympic Steel 的產品組合，從而在所有市場週期中提高了盈利能力並使其更加穩定。

We continue to make focused organic investments in all 3 business segments to expand our capacity to serve our growing customer base and enhance our returns. We are also investing in automation to continue to accelerate efficiencies, enhance safety and reduce our costs throughout the organization. Andrew will talk about some of these investments and what they mean to us in our business in just a few minutes.

我們繼續在所有 3 個業務部門進行集中有機投資，以擴大我們為不斷增長的客戶群提供服務的能力並提高我們的回報。我們還在自動化方面進行投資，以繼續提高效率、增強安全性並降低整個組織的成本。 Andrew 將在幾分鐘內討論其中一些投資以及它們對我們業務的意義。

In addition to these targeted growth of investments, we're actively seeking additional acquisitions. Our team's track record in M&A has been really good. We've identified the right targets and navigated seamless integrations, completing 5 successful and accretive deals in the past 4 years. We intend to keep on this pace by targeting profitable, well-run companies that align with the Olympic Steel's culture and core values, and also align with our strategy to build a higher return value-added portfolio.

除了這些有針對性的投資增長外，我們還在積極尋求額外的收購。我們團隊在併購方面的業績非常好。我們已經確定了正確的目標並進行了無縫集成，在過去 4 年中完成了 5 項成功且增值的交易。我們打算通過瞄準符合奧林匹克鋼鐵文化和核心價值觀的盈利、經營良好的公司，並符合我們建立更高回報增值組合的戰略來保持這一步伐。

And finally, I'd like to note that we published our first Corporate Responsibility Report in May. Corporate responsibility, while it's always been a priority at Olympic Steel, this report highlights our commitment to environmental stewardship, social engagement, strong governance, ethical conduct and safety throughout our organization. And regarding safety, I'm also excited to share that 18 of our divisions were recognized by the Fabricators & Manufacturers Association, that's the FMA, for outstanding safety performance. We congratulate every one of those divisions for their unrelenting commitment to our safety culture.

最後，我想指出，我們在 5 月發布了第一份企業責任報告。企業責任雖然一直是Olympic Steel 的首要任務，但這份報告強調了我們對整個組織的環境管理、社會參與、強有力的治理、道德行為和安全的承諾。關於安全，我也很高興分享我們的 18 個部門因出色的安全性能而獲得製造商和製造商協會（即 FMA）的認可。我們祝賀每個部門對我們的安全文化的不懈承諾。

Now I'll turn the call over to Andrew and he'll provide more details on our segments. Andrew?

現在我將把電話轉給 Andrew，他將提供有關我們細分市場的更多詳細信息。安德魯？

Thank you, Rick, and good morning to everybody on this call.

謝謝你，里克，大家早上好。

As Rick noted, all 3 business segments continued to perform at exceptionally high levels in the second quarter. Our overall sales volume in the second quarter of 2022 was comparable to the second quarter of 2021 after adjusting for the disposition of our Detroit division last September. Our adjusted EBITDA in the second quarter of 2022 was $58.8 million compared to $51.7 million in last year second quarter and $56 million in the first quarter of this year.

正如 Rick 所指出的，所有 3 個業務部門在第二季度繼續保持異常高水平的表現。在對去年 9 月底特律分部的配置進行調整後，我們 2022 年第二季度的整體銷量與 2021 年第二季度相當。我們在 2022 年第二季度調整後的 EBITDA 為 5880 萬美元，而去年第二季度為 5170 萬美元，今年第一季度為 5600 萬美元。

Sales were up in all of our business segments, compared with the second quarter of last year. Specialty Metals set new sales and EBITDA records for the quarter as sales increased by 64% from a year ago to $227 million and EBITDA improved to $37.5 million. In fact, Specialty Metals' first half EBITDA of $72.6 million nearly surpassed the segment's full-year 2021 EBITDA.

與去年第二季度相比，我們所有業務部門的銷售額均有所增長。特種金屬在本季度創下了新的銷售額和 EBITDA 記錄，銷售額同比增長 64% 至 2.27 億美元，EBITDA 提高至 3750 萬美元。事實上，特種金屬上半年的 EBITDA 為 7260 萬美元，幾乎超過了該部門 2021 年全年的 EBITDA。

Pipe and Tube continue to deliver excellent results as demand from our customer base remains strong. Sales for the segment was $112 million for the quarter, up 21% from a year ago, generating $8.5 million of EBITDA. It was another strong quarter for the Carbon segment, with sales up 14% to $371 million and EBITDA of $18.3 million. Our team has done an excellent job managing through waves of hot-rolled pricing fluctuations during the last few quarters.

由於我們客戶群的需求仍然強勁，管道和管材繼續提供出色的結果。本季度該部門的銷售額為 1.12 億美元，比去年同期增長 21%，產生 850 萬美元的 EBITDA。這是 Carbon 部門的又一個強勁季度，銷售額增長 14% 至 3.71 億美元，EBITDA 為 1830 萬美元。在過去幾個季度中，我們的團隊在管理一波又一波的熱軋價格波動方面做得非常出色。

Importantly, when you look at our overall segment results, you see our mix is changing as a result of our capital deployment strategy. As a percentage of sales, our Carbon segment is close to becoming approximately 50% of the business. Our mix within carbon has also shifted towards value-added products. We believe this diversification will help us weather pricing headwinds and allow us to deliver consistent profitability in all market cycles. As Rick mentioned, we are actively deploying capital right now to accelerate profitable growth.

重要的是，當您查看我們的整體細分市場結果時，您會發現我們的組合正在因我們的資本部署策略而發生變化。作為銷售額的百分比，我們的碳業務部門接近成為業務的約 50%。我們在碳中的組合也已轉向增值產品。我們相信這種多元化將幫助我們度過定價逆風，並使我們能夠在所有市場週期中提供一致的盈利能力。正如 Rick 所說，我們現在正在積極部署資本以加速盈利增長。

As noted on last quarter's call, much of the equipment we have ordered is subject to long lead times and has delayed the implementation of some of our projects. Despite these delays, we are successfully moving along several key projects. We expect our second auto stamping press in Winder will be online next week, adding 50,000 tons of annual capacity to this operation to support our growing transplant automotive business in the Southeast.

正如上個季度的電話會議所指出的，我們訂購的大部分設備都需要很長的交貨時間，並延遲了我們一些項目的實施。儘管有這些延誤，我們還是成功地推進了幾個關鍵項目。我們預計我們在 Winder 的第二台汽車沖壓機將於下週上線，為該業務增加 50,000 噸的年產能，以支持我們在東南部不斷增長的移植汽車業務。

In addition, we expect our 2 new 10K lasers and 2 new robotic welders will be fully operational at our Buford, Georgia, facility later in August. This will expand our value-added fabrication capabilities for key customers and help alleviate the need for additional labor through automation. We have also leased a new 80,000-square-foot white metals fabrication facility in Bartlett, Illinois, near our Schaumburg distribution center, to serve the growing fabrication needs of our customers.

此外，我們預計我們的 2 台新 10K 激光器和 2 台新機器人焊機將在 8 月晚些時候在我們位於喬治亞州佈福德的工廠全面投入使用。這將擴大我們為關鍵客戶提供的增值製造能力，並有助於通過自動化減少對額外勞動力的需求。我們還在伊利諾伊州巴特利特租用了一個新的 80,000 平方英尺的白色金屬製造設施，靠近我們的紹姆堡配送中心，以滿足客戶不斷增長的製造需求。

Similar to the successful approach we took with Winder and Buford, all current fabrication in Schaumburg will be moved to this location. This facility is expected to be fully operational in early 2023. And in Des Moines, Iowa, we have begun a 30,000 square foot expansion of our Pipe and Tube facility to support growth opportunities in this segment. We expect the expansion to be completed in early 2023. We are excited about the progress we are making with these investments, and we look forward to updating you as we continue to move forward.

與我們對 Winder 和 Buford 採取的成功方法類似，目前在 Schaumburg 的所有製造都將轉移到這個位置。該設施預計將於 2023 年初全面投入運營。在愛荷華州的得梅因，我們已經開始擴建 30,000 平方英尺的管道和管材設施，以支持該領域的增長機會。我們預計擴建將在 2023 年初完成。我們對這些投資所取得的進展感到興奮，並期待在我們繼續前進的過程中為您提供最新信息。

Turning now to our market outlook. While all metal products are experiencing downward pressures on pricing, we remain optimistic about the underlying demand. We have not experienced significant pullbacks in any market, and several of our OEM customers have strong backlogs as they continue to be challenged by labor and supply chain issues. With that said, customers are sharing concerns about the potential impact of a recession, and we are monitoring macroeconomic trends and customer activity closely. Several signs point to the stabilization of metal pricing.

現在轉向我們的市場前景。儘管所有金屬產品的價格都面臨下行壓力，但我們仍對潛在需求持樂觀態度。我們在任何市場都沒有經歷過明顯的回調，我們的一些 OEM 客戶有大量積壓，因為他們繼續受到勞動力和供應鏈問題的挑戰。話雖如此，客戶對經濟衰退的潛在影響表示擔憂，我們正在密切關注宏觀經濟趨勢和客戶活動。一些跡象表明金屬價格趨於穩定。

Looking further ahead, we should start to see infrastructure activity pick up as states reset their budgets to match an expected inflow of federal funds in late 2022 and early 2023. In addition, high energy prices are also driving new investment in energy production, which could bolster future demand. Despite the expected near-term pricing headwinds, we are confident that our company is well positioned to withstand the effects of market cyclicality, and we expect to navigate those headwinds successfully in the second half of 2022.

展望未來，隨著各州重新調整預算以匹配 2022 年底和 2023 年初聯邦資金的預期流入，我們應該會開始看到基礎設施活動回升。此外，高能源價格也推動了對能源生產的新投資，這可能提振未來需求。儘管預計近期會出現定價逆風，但我們相信我們公司能夠很好地抵禦市場週期性的影響，我們預計將在 2022 年下半年成功應對這些逆風。

In summary, we will continue to focus on what we can control, how and where we deploy capital, turning our inventory and managing operating expenses. We'll continue to pursue our strategy to grow the business and further diversify and reduce the impact of market cyclicality.

總而言之，我們將繼續專注於我們可以控制的內容、我們如何以及在何處部署資本、周轉庫存和管理運營費用。我們將繼續推行我們的戰略，以發展業務並進一步多元化並減少市場週期性的影響。

Now I'll turn the call over to Rich.

現在我將把電話轉給 Rich。

Thank you, Andrew, and good morning, everyone. As Rick and Andrew have shared, we delivered another quarter of record-breaking results, surpassing records we just set a quarter ago with strong performance across all of our segments. As I discuss our results in more detail, please keep in mind that we completed the disposition of our Detroit operations during the third quarter of 2021, and we acquired Shaw Stainless & Alloy in the fourth quarter of 2021. Both of those transactions had an impact on our quarter-over-quarter and year-over-year comparisons.

謝謝你，安德魯，大家早上好。正如 Rick 和 Andrew 所分享的那樣，我們又取得了創紀錄的四分之一業績，超過了我們剛剛在一個季度前創下的紀錄，我們所有部門的表現都非常出色。當我更詳細地討論我們的結果時，請記住，我們在 2021 年第三季度完成了底特律業務的處置，我們在 2021 年第四季度收購了 Shaw Stainless & Alloy。這兩項交易都產生了影響在我們的季度環比和同比比較中。

For the second quarter of 2022, net income totaled $37.6 million compared with $29.6 million in the second quarter of 2021. Adjusted EBITDA was $58.8 million for the current quarter compared with $51.7 million a year ago. We had no LIFO adjustment in the second quarter of 2022 compared to LIFO expense of $4 million in the second quarter of last year.

2022 年第二季度的淨收入總額為 3760 萬美元，而 2021 年第二季度為 2960 萬美元。本季度調整後的 EBITDA 為 5880 萬美元，而去年同期為 5170 萬美元。與去年第二季度 400 萬美元的 LIFO 費用相比，我們在 2022 年第二季度沒有進行 LIFO 調整。

Total debt decreased by $40 million since year-end, bringing our outstanding debt down to $288 million. We expect additional debt reduction throughout 2022. At the end of the second quarter, our credit line availability was approximately $183 million. We have additional accounts receivable and inventory to support another $188 million of ABL availability, as well as a $75 million real estate line that can be activated at our discretion. Those sources provide a stockpile of capital for our capital deployment strategy.

自年底以來，總債務減少了 4000 萬美元，使我們的未償債務降至 2.88 億美元。我們預計整個 2022 年將進一步減少債務。在第二季度末，我們的可用信貸額度約為 1.83 億美元。我們有額外的應收賬款和庫存來支持另外 1.88 億美元的 ABL 可用性，以及可以由我們自行決定激活的 7500 萬美元的房地產線。這些來源為我們的資本部署戰略提供了資本儲備。

Consolidated operating expenses totaled $94.8 million for the quarter, an increase of $9.8 million or 11.6% compared with $84.9 million a year ago. Second quarter 2022 consolidated operating expenses include $2 million of Shaw operating expenses and $5.2 million of higher incentive expenses when compared to a year ago in the second quarter. Additionally, we experienced significant inflationary pressure and distribution expense during the second quarter of 2022.

本季度合併運營費用總額為 9480 萬美元，比一年前的 8490 萬美元增加 980 萬美元或 11.6%。與去年第二季度相比，2022 年第二季度的合併運營費用包括 200 萬美元的 Shaw 運營費用和 520 萬美元的更高獎勵費用。此外，我們在 2022 年第二季度經歷了巨大的通脹壓力和分銷費用。

When adjusted for the sale of our former Detroit division, outbound freight costs were up $3.1 million year-over-year. This results from the Ukraine invasion as we saw diesel prices approaching $6 per gallon in the second quarter of 2022 compared to under $3 per gallon in the second quarter of 2021. Capital expenditures totaled $10.1 million for the second quarter of 2022 compared with depreciation of $8.7 million. As Andrew discussed, long lead times are slowing the utilization of cash to fund our organic growth projects.

對出售我們的前底特律分部進行調整後，出境貨運成本同比增長 310 萬美元。這是烏克蘭入侵造成的，因為我們看到 2022 年第二季度柴油價格接近每加侖 6 美元，而 2021 年第二季度低於每加侖 3 美元。2022 年第二季度的資本支出總額為 1010 萬美元，而折舊為 8.7 美元百萬。正如安德魯所討論的那樣，較長的交貨時間正在減緩現金的利用來資助我們的有機增長項目。

During the first half of 2022, we approved $31 million of organic growth capital deployment, but long lead times will push the need to fund these projects into 2023. For full-year 2022, we anticipate cash utilization of $20 million of capital expenditures. Our effective income tax rate for the second quarter was 27.1% compared with 26.6% for the second quarter of 2021. We expect our 2022 effective tax rate to remain within the 27% to 28% range. And for the third consecutive quarter, the Board of Directors approved a quarterly cash dividend at the higher rate of $0.09 per share. The company has now paid dividends for 69 consecutive quarters.

在 2022 年上半年，我們批准了 3100 萬美元的有機增長資本部署，但較長的交付週期將把這些項目的資金需求推到 2023 年。對於 2022 年全年，我們預計將使用 2000 萬美元的現金資本支出。我們第二季度的有效所得稅率為 27.1%，而 2021 年第二季度為 26.6%。我們預計 2022 年的有效稅率將保持在 27% 至 28% 的範圍內。連續第三個季度，董事會批准了以每股 0.09 美元的較高利率派發季度現金股息。公司現已連續69個季度派息。

In closing, I would like to congratulate our entire team at Olympic Steel for delivering another historic quarter performance. As we move into the second half of the year, we are facing pricing headwinds and recessionary fears. Despite these challenges, we remain confident that Olympic Steel is positioned to endure macroeconomic pressures and market cyclicality and to more consistently grow profitability.

最後，我要祝賀Olympic Steel 的整個團隊再次取得歷史性的季度業績。隨著我們進入下半年，我們正面臨定價逆風和衰退擔憂。儘管存在這些挑戰，我們仍然相信Olympic Steel 能夠承受宏觀經濟壓力和市場週期性，並更加持續地提高盈利能力。

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

現在接線員，讓我們打開問題的電話。

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

（操作員說明）我們的第一個問題來自 Stonegate Capital Markets 的 Marco Rodriguez。

I was wondering maybe we could start on the carbon side. Just kind of looking through and thinking about your volume expectations there, the tons sold, I know there's some moving parts that you've obviously mentioned in the past with the Detroit divestiture, the Shaw acquisition. But looking here at the last 3 quarters or so, you're shipping about or selling about 200,000 tons or so per quarter. And I know that there also might be some headwinds from supply constraints. So maybe you can kind of dissect that a little bit, kind of give us a sense, if at all, what is being pressured? Or what can you not ship because of the supply constraints and what is sort of like your thinking through the second half in terms of volumes for carbon?

我想知道也許我們可以從碳方面開始。只是仔細查看並考慮您的銷量預期，售出的噸數，我知道您過去在底特律剝離和 Shaw 收購中顯然提到了一些活動部分。但看看過去 3 個季度左右，您每季度出貨或銷售大約 200,000 噸左右。而且我知道供應限制也可能帶來一些不利因素。所以也許你可以稍微剖析一下，給我們一個感覺，如果有的話，什麼是壓力？或者由於供應限制，你不能運送什麼？你在下半年的碳排放量方面有什麼想法？

Yes. So Marco, this is Andrew. Thank you for the question. So we would expect that third quarter is going to be for us a traditional quarter. So we saw in July that carbon sales were off a little bit as we expect traditionally in July. And we think August and September are going to be relatively steady, maybe even -- certainly better than what we think from July. The backlog from the OEMs, they have not been able to get into and specifically on the industrial OEMs. They've been very steady. And while they've been trying to eat into the backlog because of the supply chain issues, just have not been able to -- and therefore, our shipments to some of the larger industrial customers have been relatively steady. Their forecasts don't show great movement over the next 30 days to 60 days. And so we anticipate that the tonnage being shipped is going to be -- should be relatively steady.

是的。所以馬可，這是安德魯。感謝你的提問。因此，我們預計第三季度對我們來說將是一個傳統的季度。因此，我們在 7 月份看到，與我們在 7 月份的傳統預期一樣，碳銷售量略有下降。而且我們認為 8 月和 9 月會相對穩定，甚至可能會比我們從 7 月開始的預期要好。來自原始設備製造商的積壓，他們無法進入並專門針對工業原始設備製造商。他們一直很穩定。儘管由於供應鏈問題，他們一直試圖消化積壓，但未能做到——因此，我們對一些較大的工業客戶的出貨量相對穩定。他們的預測在接下來的 30 天到 60 天內不會出現很大的變化。因此，我們預計運輸的噸位將 - 應該相對穩定。

Got it. Very helpful. And if you can maybe also discuss the Specialty Metals side as well. I know that you guys run allocation there for a while. Can you just kind of update us there and what your thoughts are regarding volume?

知道了。非常有幫助。如果你也可以討論特種金屬方面。我知道你們在那裡運行了一段時間的分配。您能在那裡向我們介紹一下您對音量的看法嗎？

Yes. Sure. So you're still seeing pressure on the domestic mills, so allocation of the domestic mills. But Imports have certainly picked up the last 3 months or 4 months, and that certainly put pressure on pricing. It's added some availability into the marketplace. So again, the volume from our contract customers will be pretty steady, I would say, on the spot side of it. It's been more challenged.

是的。當然。所以你仍然看到國內鋼廠的壓力，所以國內鋼廠的分配。但過去 3 個月或 4 個月進口量肯定有所回升，這無疑給定價帶來了壓力。它為市場增加了一些可用性。再說一次，我們的合同客戶的交易量將非常穩定，我想說，在它的現貨方面。它受到了更大的挑戰。

Customers are buying more frequently as opposed to before where they may have bought full truckloads. They're buying half loads and maybe even quarter loads as the market has come down from a pricing perspective. But I would tell you that the contract customers, in particular for us, the food equipment and truck trailer customers are still very busy, but we expect with some additional imports and some pricing pressure that we'll certainly see it on the margin side.

與以前購買整車的情況相比，客戶的購買頻率更高。隨著市場從定價的角度來看，他們正在購買一半甚至四分之一的負載。但我會告訴你，合同客戶，特別是對我們來說，食品設備和卡車拖車客戶仍然非常忙碌，但我們預計隨著一些額外的進口和一些定價壓力，我們肯定會在利潤方面看到它。

Got it. And in your prepared remarks, you discussed some of the conversations you're having with end customers. There's, I guess, some growing concern obviously due to the macroeconomic picture and potential recession. If maybe you could expand on that comment to just maybe discuss whether you have any sense as far as what their base cases might be in terms of shallow recessions, deeper recession? Just any kind of thoughts there would be helpful.

知道了。在您準備好的評論中，您討論了您與最終客戶進行的一些對話。我想，由於宏觀經濟形勢和潛在的衰退，人們顯然越來越擔心。如果也許您可以擴展該評論，以討論您是否對他們的基本情況在淺度衰退和深度衰退方面有任何了解？只要有任何想法都會有所幫助。

Yes. What I would tell you, Marco, is I think it's a lot of conjecture and not so much specifics as their forecasts really have not changed. I think it's more of a, hey, we're reading this, what are you hearing, we're getting concerned, where do you see third and fourth quarter going as opposed to, hey, you should really take a look at our forecast and see where the cutbacks are going to be. I would say the customers are still pretty optimistic that their levels are going to remain where they're at, taking into consideration the seasonality. And I think just a general concern when they're seeing the Fed talking about increase of rates and recessionary concerns, inflationary concerns. But at the moment, we really haven't seen that relative to their forecasts.

是的。 Marco，我想告訴你的是，我認為這是很多猜測，而不是細節，因為他們的預測確實沒有改變。我認為這更像是，嘿，我們正在閱讀這篇文章，您在聽到什麼，我們開始擔心，您認為第三季度和第四季度的走勢如何，而不是，嘿，您真的應該看看我們的預測看看削減將在哪裡。我想說，考慮到季節性因素，客戶仍然非常樂觀地認為他們的水平將保持在原來的水平。當他們看到美聯儲談論加息和衰退擔憂、通脹擔憂時，我認為這只是一個普遍的擔憂。但目前，相對於他們的預測，我們真的沒有看到這一點。

Got it. Helpful. And last quick question for me. Maybe you can talk a little bit, update us on what you're seeing on the M&A landscape opportunities, what pricing might look like?

知道了。有幫助。最後一個簡短的問題。也許您可以談談，向我們介紹您在併購領域看到的機會，定價可能是什麼樣的？

Yes. Good question, Marco. This is Rick. As we said in prepared comments, I can speak first about Olympic and what our desires are. So we're actively continuing to see growth via acquisition. As I've said in prior quarters, I feel confident we're going to continue to make acquisitions. We would hope to make one yet this year. In terms of the landscape for M&A, I'd tell you, the last quarter, probably seen more activity than we've seen in a long, long time. I think the shift in the marketplace in terms of what we're seeing on pricing and some of the forward indicators on pricing are leading to maybe some even more difficult assertations in terms of value from a meeting of the minds from buyers and sellers.

是的。好問題，馬可。這是瑞克。正如我們在準備好的評論中所說，我可以先談談奧運會以及我們的願望是什麼。因此，我們通過收購積極地繼續看到增長。正如我在前幾個季度所說，我有信心我們將繼續進行收購。我們希望今年能製作一個。就併購的前景而言，我會告訴你，上個季度的併購活動可能比我們在很長很長一段時間內看到的更多。我認為，就我們在定價方面看到的市場變化以及定價的一些前瞻性指標而言，可能會導致買家和賣家在價值方面的一些更困難的斷言。

So typically, as you look at the valuation and you look at performance, at least the way we do over a steel cycle, we've had some really unique and challenging markets here over the last 2 years to 3 years with the downturn with COVID, the rapid rise in price and recovery. So I think the trick right now is really ascertaining what that value really is, if it's a profitability or an EBITDA type of multiple. But Olympic is sticking to our strategies. We want to buy well-run companies that fit in with our desire to get more consistent earnings, higher returns, some new geographies and that's kind of what we're focused on. And I do believe we're going to be able to execute on that, and there'll be a meeting of the minds in terms of the sellers and the buyers. But a lot of activity, I'd tell you, probably in terms of the inflow from bankers, we've probably seen more books and more offers than we've seen in several years.

因此，通常情況下，當您查看估值和業績時，至少就像我們在鋼鐵週期中所做的那樣，在過去的 2 年到 3 年中，隨著 COVID 的低迷，我們在這裡擁有一些非常獨特且具有挑戰性的市場，價格快速回升。所以我認為現在的訣竅是真正確定這個價值到底是什麼，如果它是盈利能力或 EBITDA 類型的倍數。但奧林匹克堅持我們的戰略。我們希望收購經營良好的公司，這些公司符合我們獲得更穩定收益、更高回報、一些新地區的願望，而這正是我們所關注的。而且我確實相信我們將能夠執行此操作，並且將在賣方和買方方面進行思想會議。但我要告訴你，很多活動，可能就來自銀行家的流入而言，我們可能已經看到了比幾年來更多的書籍和更多的報價。

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

（操作員說明）我們的下一個問題來自 Singular Research 的 Chris Sakai。

Can you comment on your shipping and transportation costs in the third quarter? How are they? Are they somewhat similar to the second quarter?

您能否評論一下您在第三季度的運輸和運輸成本？他們怎麼樣？它們與第二季度有些相似嗎？

Sure, Chris. It's Rich. And I think what you're going to see is, yes, I think third quarter distribution expense will look a lot like second quarter distribution expense adjusted for the seasonal shipping rates. What I said in the prepared comments was that in the second quarter after the Ukraine invasion, essentially, we saw $6 per gallon diesel fuel compared with less than $3 in the second quarter of 2021. And I even went back and looked at the first quarter, first quarter diesel prices prior to the Ukraine invasion were in the low 3s. And so I think you can almost see this doubling of diesel price per gallon. So yes, Q3 is going to look a lot like Q2 in terms of the distribution expense.

當然，克里斯。是富。而且我認為您將看到的是，是的，我認為第三季度的分銷費用看起來很像根據季節性運費調整的第二季度分銷費用。我在準備好的評論中說的是，在烏克蘭入侵後的第二季度，基本上，我們看到每加侖柴油 6 美元，而 2021 年第二季度不到 3 美元。我什至回頭看了第一季度，烏克蘭入侵前的第一季度柴油價格處於低位 3s。所以我認為你幾乎可以看到每加侖柴油價格翻了一番。所以是的，就分銷費用而言，第三季度看起來很像第二季度。

Okay. And then for these investments that you've made, when -- to what magnitude will we see it increase top line revenue and when?

好的。然後對於您所做的這些投資，我們會在什麼時候看到它增加頂線收入的幅度以及什麼時候？

Yes. So I think we commented in Andrew's section. So the first thing is we'll be phasing in these in the back half of this year. So we're excited to get the equipment up and running in terms of down in Winder. The building in Des Moines, we probably aren't going to be ready to see any type of expansion there in 2023. But we're looking at these expansions to be a $10 million plus power boost to EBITDA starting in 2023.

是的。所以我想我們在安德魯的部分發表了評論。所以第一件事是我們將在今年下半年逐步實施這些。因此，我們很高興能夠在 Winder 中啟動並運行設備。得梅因的大樓，我們可能不會準備好在 2023 年看到那裡的任何類型的擴張。但我們認為這些擴張將從 2023 年開始為 EBITDA 增加 1000 萬美元以上的動力。

Yes. I would just add to what Rick said, I think the full boost comes in 2024 as the expansions get phased in. Obviously, the stuff down South, the automotive stuff will have the most impact in 2022. I think the Bartlett comes into 2023 and Des Moines as well as 2023, but fully ramped up in 2024.

是的。我想補充一下 Rick 所說的話，我認為隨著擴張的逐步實施，2024 年將全面提升。顯然，南方的東西，汽車的東西將在 2022 年產生最大的影響。我認為 Bartlett 進入 2023 年並且得梅因以及 2023 年，但在 2024 年全面提升。

Yes. And I think Andrew spoke in his comments, the press is the big volume piece of equipment that we're adding. And once that's ramped up, I mean that's 50,000 tons of annual capacity.

是的。我認為安德魯在他的評論中說，媒體是我們正在添加的大量設備。一旦增加，我的意思是年產能為 50,000 噸。

Well, that's right. That's right. And Chris, so we have the first automotive stamping press is full. The second one should be operational starting next week. Everything is in. We're about 2 months behind, 3 months behind with delivery on that. But that is -- that's close to being full, and we'll see really the benefits of that as we start coming into next year. But on the automotive side, for those presses, we're seeing actually an increase from the customers for the parts down South. So we're pretty excited by that.

嗯，沒錯。這是正確的。還有克里斯，所以我們第一台汽車沖壓機是滿的。第二個應該從下週開始運行。一切都在。我們落後了大約 2 個月，交貨時間落後了 3 個月。但這就是——這已經接近滿了，當我們開始進入明年時，我們將真正看到這樣做的好處。但在汽車方面，對於那些印刷機，我們實際上看到南方零件的客戶有所增加。所以我們對此感到非常興奮。

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Marabito for any final comments.

謝謝你。女士們，先生們，我們的問答環節到此結束。最後請 Marabito 先生髮言。

Thank you, operator, and thank all of you for joining us on our call today. We greatly appreciate your continued interest in Olympic Steel and certainly look forward to speaking with you again next quarter, if not sooner. Have a great day.

謝謝你，接線員，感謝你們今天加入我們的電話會議。我們非常感謝您對Olympic Steel 的持續關注，當然期待下個季度（如果不是更早的話）再次與您交談。祝你有美好的一天。

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

謝謝你。今天的會議到此結束。此時您可以斷開線路。感謝您的參與。