Olympic Steel Inc (ZEUS) 2022 Q4 法說會逐字稿

Good morning, and welcome to the Olympic Steel 2022 Fourth Quarter and Full Year Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the conference over to Rich Manson, Chief Financial Officer at Olympic Steel. Please go ahead, sir.

早上好，歡迎來到奧鋼 2022 年第四季度及全年財務業績電話會議。 （操作員說明）提醒一下，正在錄製此會議。我現在想把會議交給 Olympic Steel 的首席財務官 Rich Manson。請繼續，先生。

Thank you, operator. Welcome to Olympic Steel's earnings call for the fourth quarter and full year 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，運營商。歡迎來到 Olympic Steel 的第四季度和 2022 年全年財報電話會議。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。

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.

在我們開始之前，我有幾點提醒。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》的安全港條款作為前瞻性聲明，可能不會反映實際結果。公司不承諾更新此類陳述、假設的變化或影響此類前瞻性陳述的其他因素的變化。公司關於 10-K 和 10-Q 表格的報告以及向美國證券交易委員會提交的新聞稿中列出了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。

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 Olympic's Steel's website. At this time, I'll turn the call over to Rick.

在今天的討論中，我們可能會提到調整後的稀釋後每股淨收益、EBITDA 和調整後的 EBITDA，這些都是非 GAAP 財務指標。昨晚發布的新聞稿中提供了這些非 GAAP 措施與最直接可比的 GAAP 財務措施的對賬，可以在我們的網站上找到。今天的現場直播將被存檔，並可在奧林匹克鋼鐵公司的網站上重播。這時候，我會把電話轉給里克。

Thank you, Rich, and good morning, everyone. Thank you for joining us on today's conference call to discuss Olympic Steel's fourth quarter and full year results for 2022. I'll begin with an overview of another strong quarter and an exceptional year for Olympic Steel. I also want to offer some reflections on Olympic Steel's successful strategic journey to be less cyclical and consistently earn higher returns. Then Andrew will review highlights from each segment, share additional details on our recent acquisition and comment on our market outlook. Following that, Rich will discuss our financial results in more detail. And then as always, we'll open up the call for your questions.

謝謝你，里奇，大家早上好。感謝您參加今天的電話會議，討論 Olympic Steel 的第四季度和 2022 年全年業績。我將首先概述 Olympic Steel 另一個強勁的季度和非凡的一年。我還想對 Olympic Steel 減少週期性並持續獲得更高回報的成功戰略之旅提出一些思考。然後安德魯將回顧每個細分市場的亮點，分享我們最近收購的更多細節，並對我們的市場前景發表評論。之後，里奇將更詳細地討論我們的財務業績。然後一如既往，我們將打開您的問題的電話。

Our fourth quarter capped off another year of extraordinary performance for Olympic Steel. Although we faced the steepest and fastest decline on record in metals pricing, combined with economic and nonmetal inflationary pressures, our team weathered these challenges to deliver the second most profitable year in company history behind only 2021 with our specialty metals and pipe and tube segments both achieving all-time profitability highs in 2022.

我們的第四季度為 Olympic Steel 又一年的非凡表現畫上了句號。儘管我們面臨著金屬價格有記錄以來最陡峭和最快的下降，再加上經濟和非金屬通脹壓力，但我們的團隊經受住了這些挑戰，實現了公司歷史上第二大盈利年度，僅次於 2021 年，我們的特種金屬和管道和管材部門都2022 年盈利能力創歷史新高。

These results show that our strategy to reduce the impact of market cyclicality in our business is working. As we have highlighted on past calls, we initiated a very intentional effort to build a more resilient, diversified Olympic Steel that is delivering higher returns.

這些結果表明，我們減少市場週期性對我們業務影響的戰略正在奏效。正如我們在過去的電話會議上強調的那樣，我們發起了一項非常有意識的努力，以建立一個更具彈性、多元化的奧林匹克鋼鐵公司，以提供更高的回報。

We have taken deliberate steps to diversify into higher return products and services through acquisitions and targeted organic investments in all 3 of our business segments. We also divested of assets that no longer align with our vision for the company by selling our Detroit operation in 2021 and then utilizing the proceeds for higher return investments.

我們已採取深思熟慮的步驟，通過對我們所有 3 個業務部門的收購和有針對性的有機投資，實現更高回報的產品和服務的多元化。我們還剝離了不再符合我們公司願景的資產，方法是在 2021 年出售我們在底特律的業務，然後利用所得款項進行更高回報的投資。

We did this while relentlessly adhering to our operational disciplines to improve inventory turnover and rightsize our cost profile. Together, these actions have strengthened our business, increased our capacity, made us more efficient and improved our profitability and returns, even in the face of rapidly declining market prices.

我們這樣做的同時堅持不懈地遵守我們的運營紀律，以提高庫存周轉率並調整我們的成本狀況。這些舉措共同加強了我們的業務，提高了我們的產能，提高了我們的效率，提高了我們的盈利能力和回報率，即使面對市場價格迅速下跌的情況也是如此。

Importantly, we also improved our balance sheet and increased our ability to invest in our future. In 2022, our record cash flow resulted in a $162 million or 49% reduction of debt, providing increased liquidity for higher return growth opportunities, including the January 2023 purchase of Metal-Fab, our second largest acquisition in our history and our sixth acquisition in the last 5 years.

重要的是，我們還改善了資產負債表並增強了對未來的投資能力。 2022 年，我們創紀錄的現金流使債務減少了 1.62 億美元或 49%，為更高的回報增長機會提供了更多的流動性，包括 2023 年 1 月收購 Metal-Fab，這是我們歷史上第二大收購以及我們在最近 5 年。

Metal Fab is a perfect fit for Olympic Steel, bringing a consistent recession-resistant track record of double-digit EBITDA margins and adding an expanded catalog of products to our growing portfolio. We're very excited to welcome Metal-Fab to the Olympic Steel family, and Andrew and Rich will talk more about Metal-Fab in their remarks.

Metal Fab 非常適合 Olympic Steel，它帶來了兩位數 EBITDA 利潤率的一貫抗衰退記錄，並為我們不斷增長的產品組合增加了更多產品目錄。我們非常高興地歡迎 Metal-Fab 加入 Olympic Steel 大家庭，Andrew 和 Rich 將在他們的發言中更多地談論 Metal-Fab。

While the integration of Metal-Fab is a priority for 2023, we continue to actively evaluate additional acquisitions and organic growth opportunities that align with our strategy, meet our return expectations and allow us to leverage our business model.

雖然 Metal-Fab 的整合是 2023 年的優先事項，但我們將繼續積極評估符合我們戰略的額外收購和有機增長機會，滿足我們的回報預期並讓我們能夠利用我們的商業模式。

Additional successes in 2022 included our strong safety performance with a 26% year-over-year reduction in OSHA recordable incidents. We also published our first corporate responsibility report and advanced our diversity, equity and inclusion plan. We're also proud to have increased our support to a greater number of charities through our corporate citizenship initiatives.

2022 年的其他成功包括我們強大的安全性能，OSHA 可記錄事件同比減少 26%。我們還發布了第一份企業責任報告，並推進了我們的多元化、公平和包容計劃。我們也很自豪能夠通過我們的企業公民倡議增加對更多慈善機構的支持。

As we begin 2023, Olympic Steel is stronger and more resilient than ever. In January, we upsized our asset-based revolver from $475 million to $625 million, providing additional capital to further execute our growth strategy through acquisitions and robust organic growth expenditures while simultaneously rewarding our shareholders with an increased quarterly dividend of $0.125.

2023 年伊始，Olympic Steel 比以往任何時候都更強大、更有彈性。 1 月，我們將基於資產的循環投資從 4.75 億美元增加到 6.25 億美元，提供額外資本以通過收購和強勁的有機增長支出進一步執行我們的增長戰略，同時以增加的 0.125 美元的季度股息回報我們的股東。

Before I turn the call over to Andrew, I want to reinforce how incredibly proud I am of the Olympic Steel team. Earlier this year, we were named a Forbes Magazine's list of America's best small-cap companies. I believe the market is recognizing that we have repositioned Olympic Steel as a highly innovative, growing acquisitive business that is more resilient to the cyclicality of the metals industry, but our job is not finished. We'll continue to operate efficiently with the aid of continued investments in automation and grow our business in a smart, strategic way. We're very excited about the future of Olympic Steel. Andrew?

在我將電話轉給安德魯之前，我想強調一下我對 Olympic Steel 團隊的無比自豪。今年早些時候，我們被福布斯雜誌評為美國最佳小型公司名單。我相信市場已經認識到，我們已經將奧林匹克鋼鐵公司重新定位為一家高度創新、不斷增長的收購企業，對金屬行業的周期性更具彈性，但我們的工作還沒有完成。借助對自動化的持續投資，我們將繼續高效運營，並以明智的戰略方式發展我們的業務。我們對 Olympic Steel 的未來感到非常興奮。安德魯？

Thank you, Rick, and good morning, everyone. Before I review our business results, on behalf of the entire Olympic Steel family, I want to take a moment to acknowledge our colleague, Rick Marabito, for being named the 2022 Service Center Executive of the Year by Metal Center News. This well-deserved recognition stems from Rick's dedication to the industry as well as his clear vision, tireless commitment and inspirational leadership during the period of transformation across our enterprise. Congratulations, Rick.

謝謝你，里克，大家早上好。在我回顧我們的業務成果之前，我代表整個 Olympic Steel 家族，想花點時間感謝我們的同事 Rick Marabito，他被 Metal Center News 評為 2022 年度服務中心主管。這一當之無愧的認可源於 Rick 在整個企業轉型期間對行業的奉獻以及他清晰的願景、不懈的承諾和鼓舞人心的領導。恭喜你，里克。

Turning now to our business performance. We ended the year with another very strong quarter as all 3 segments delivered positive EBITDA in the fourth quarter. We finished the quarter with $11.9 million of adjusted EBITDA. And in the face of the largest and steepest decline ever in metal pricing, we delivered over $37 million of adjusted EBITDA during the second half of 2022.

現在談談我們的業務表現。我們以另一個非常強勁的季度結束了這一年，因為所有 3 個部門在第四季度都實現了正的 EBITDA。我們以 1190 萬美元的調整後 EBITDA 結束了本季度。面對金屬價格有史以來最大和最陡峭的跌幅，我們在 2022 年下半年交付了超過 3700 萬美元的調整後 EBITDA。

Our fourth quarter performance is especially notable when you consider the metals pricing environment and macroeconomic challenges we faced. During the period from May 2022 to December 2022, we experienced the steepest drop ever in carbon pricing as the hot rolled index pricing fell 59%. The stainless steel surcharge for grade 304, our highest volume specialty metals product dropped 42% from April to November.

當您考慮金屬定價環境和我們面臨的宏觀經濟挑戰時，我們第四季度的表現尤其引人注目。在 2022 年 5 月至 2022 年 12 月期間，我們經歷了有史以來碳定價的最大跌幅，因為熱軋指數定價下降了 59%。 304 級不銹鋼附加費是我們產量最大的特種金屬產品，從 4 月到 11 月下降了 42%。

Our ability to perform and remain profitable under such conditions is a direct result of the steps we have taken to diversify and make our business more resilient to market cyclicality while remaining disciplined in our inventory turnover management.

我們在這種情況下的表現和保持盈利的能力是我們採取措施實現多元化並使我們的業務更能適應市場週期性，同時在我們的庫存周轉管理中保持紀律的直接結果。

Our most recent step in our strategic journey was the acquisition of Metal-Fab in January 2023. This acquisition provides a solid platform for accelerating growth in 3 of our target market segments, carbon coated, stainless and aluminum. Metal-Fab's talented and experienced management team, manufacturing expertise and catalog eventing and air filtration products are a strong addition to our growing portfolio of metal-intensive end-use products.

我們在戰略旅程中的最新一步是在 2023 年 1 月收購了 Metal-Fab。此次收購為加速我們三個目標細分市場（碳塗層、不銹鋼和鋁）的增長提供了堅實的平台。 Metal-Fab 才華橫溢且經驗豐富的管理團隊、製造專業知識以及目錄事件和空氣過濾產品是我們不斷增長的金屬密集型最終用途產品組合的有力補充。

Metal-Fab's earnings model has proven session resistant, and we expect to capitalize on operational and commercial synergies that will benefit both the Metal-Fab product lines and Olympic Steel. To date, the integration has been running smoothly, and we look forward to updating you on our progress. The business will continue to operate as Metal-Fab and will report through our carbon segment.

Metal-Fab 的盈利模式已被證明是有效的，我們希望利用運營和商業協同效應，這將使 Metal-Fab 產品線和 Olympic Steel 受益。迄今為止，集成一直在順利進行，我們期待著向您通報我們的最新進展。該業務將繼續作為 Metal-Fab 運營，並將通過我們的碳部門進行報告。

Further reinforcing our commitment to diversify and grow in high-return products is the appointment of seasoned industry veteran, Mike Tookey as Director of Coated Products. This is a newly created role in Olympic Steel. In this position, Mike will focus on accelerating growth related to coated carbon flat-rolled products and processes, including galvanized galvaneal galvalume, aluminized and automotive grades of steel.

任命經驗豐富的行業資深人士 Mike Tookey 為塗層產品總監，進一步加強了我們對高回報產品多元化和增長的承諾。這是《奧林匹克鋼鐵》中新創建的角色。在此職位上，Mike 將專注於加速與塗層碳素壓延產品和工藝相關的增長，包括鍍鋅鍍鋅鋁鋅合金、鍍鋁和汽車級鋼材。

Now for the highlights of our segments. As Rick mentioned, both specialty metals and pipe and tube delivered their most profitable year ever. The performance of our Carbon segment was also noteworthy, delivering positive EBITDA despite the steepest carbon flat price decline in history.

現在是我們細分市場的亮點。正如 Rick 所提到的，特種金屬和管材都實現了有史以來最賺錢的一年。我們的碳部門的表現也值得注意，儘管碳單位價格出現歷史上最大的跌幅，但 EBITDA 仍為正。

The Specialty Metals segment, led by Andy Markowitz, contributed EBITDA of $9.1 million in the fourth quarter of 2022, a record earnings year in spite of the considerable decline in the nickel surcharge and an increase in stainless steel coil imports throughout the year.

由 Andy Markowitz 領導的特種金屬部門在 2022 年第四季度貢獻了 910 萬美元的 EBITDA，這是創紀錄的年度盈利，儘管全年鎳附加費大幅下降且不銹鋼捲進口增加。

Our newest 80,000 square foot white metals facility in Bartlett, Illinois, is well underway, and we expect to be fully operational during the second quarter of 2023. The segment's end users, specifically truck trailer, food equipment and industrial appliance manufacturers remain busy and are performing to forecast.

我們位於伊利諾伊州巴特利特的最新的 80,000 平方英尺白色金屬工廠正在順利進行，我們預計將在 2023 年第二季度全面投入運營。該部門的最終用戶，特別是卡車拖車、食品設備和工業電器製造商仍然很忙，並且執行預測。

The pipe and tube segment, led by Bill Zelensky contributed adjusted EBITDA of $6.3 million in the fourth quarter of 2022, and as Rick noted earlier, had a record earnings year. Our continued investments in tube fabrication has increased our value-added business. We expect the previously announced addition to our Des Moines, Iowa facility will be operational in the second half of 2023.

由 Bill Zelensky 領導的管道和管材部門在 2022 年第四季度貢獻了 630 萬美元的調整後 EBITDA，正如 Rick 早些時候指出的那樣，今年的收益創歷史新高。我們對管材製造的持續投資增加了我們的增值業務。我們預計先前宣布的愛荷華州得梅因工廠將於 2023 年下半年投入運營。

Our Carbon segment led by David Gia, contributed $600,000 of EBITDA for the quarter, achieving positive EBITDA in the fourth quarter is a credit to the discipline and hard work of the segment's team, which helped us lead through a challenging marketplace. The team remains focused on the things we can control, the diligent management of operating expenses and inventory levels.

由 David Gia 領導的我們的 Carbon 部門在本季度貢獻了 600,000 美元的 EBITDA，第四季度實現正 EBITDA 歸功於該部門團隊的紀律和辛勤工作，這幫助我們在充滿挑戰的市場中取得領先。該團隊仍然專注於我們可以控制的事情，即運營費用和庫存水平的勤奮管理。

We are off to a fast start in 2023 as customer shipments have increased from the seasonally slower fourth quarter and pricing on all metal products has increased. Looking forward, we expect to be an indirect beneficiary of the increase in infrastructure spending, which will be good for the steel industry as a whole. Our industrial OEMs are optimistic that business will remain steady and expect consistent build rates through the first quarter and likely into the first half of 2023.

我們將在 2023 年快速開始，因為客戶出貨量從季節性放緩的第四季度開始增加，並且所有金屬產品的價格都上漲了。展望未來，我們預計將成為基礎設施支出增加的間接受益者，這將有利於整個鋼鐵行業。我們的工業原始設備製造商樂觀地認為，業務將保持穩定，並預計整個第一季度和可能到 2023 年上半年的建造率將保持一致。

I want to thank the entire Olympic Steel team for their hard work and contributions to another outstanding quarter and year. Our results are proof that our strategy is working but as Rick said, we haven't finished the job. As we move forward in the months and years ahead, we'll continue to grow and strengthen our business in a very purposeful way. Now I'll turn the call over to Rich.

我要感謝整個 Olympic Steel 團隊的辛勤工作和為又一個出色的季度和年度做出的貢獻。我們的結果證明我們的戰略正在奏效，但正如里克所說，我們還沒有完成這項工作。隨著我們在未來幾個月和幾年的前進，我們將繼續以非常有目的的方式發展和加強我們的業務。現在我將電話轉給 Rich。

Thank you, Andrew, and good morning, everyone. As you have heard from Rick and Andy, our fourth quarter performance and full year performance shows that we are well positioned for success in all market cycles.

謝謝安德魯，大家早上好。正如您從 Rick 和 Andy 那裡聽到的那樣，我們第四季度的業績和全年業績表明我們已做好準備在所有市場週期中取得成功。

For the quarter, net income totaled $4 million compared with $24.9 million in the fourth quarter of 2021. Adjusted EBITDA was $11.9 million for the quarter and $152 million for the full year, making 2022 the second most profitable year in our company's history.

本季度淨收入總計 400 萬美元，而 2021 年第四季度為 2490 萬美元。本季度調整後的 EBITDA 為 1190 萬美元，全年為 1.52 億美元，使 2022 年成為我們公司歷史上第二大盈利年份。

Our total debt decreased by $162 million or almost 50% to $166 million at year-end 2022. That includes a $78 million reduction of debt during the fourth quarter. At year-end, our credit availability was approximately $306 million. As Rick noted earlier, in January 2023, we increased our asset base revolver from $475 million to $625 million, providing access to additional capital. Following the $131 million acquisition of Metal-Fab, our availability remains in the $300 million range, providing us with significant capital to continue our growth and diversification strategy through investments in acquisitions, new capacity and automation to drive increased efficiency.

到 2022 年底，我們的總債務減少了 1.62 億美元，即近 50% 至 1.66 億美元。其中包括第四季度減少的 7800 萬美元債務。年底時，我們的可用信貸額約為 3.06 億美元。正如 Rick 之前指出的那樣，在 2023 年 1 月，我們將資產基礎循環從 4.75 億美元增加到 6.25 億美元，從而提供了獲得額外資本的途徑。在以 1.31 億美元收購 Metal-Fab 之後，我們的可用性仍保持在 3 億美元的範圍內，這為我們提供了大量資金，通過對收購、新產能和自動化的投資來推動效率的提高，以繼續我們的增長和多元化戰略。

During the first quarter of 2023, we expect our working capital needs to increase as metal pricing has increased and working capital needs expand from their seasonally low balances on December 31. However, we do expect further debt reduction during 2023, primarily occurring in the second half of the year.

在 2023 年第一季度，我們預計我們的營運資金需要增加，因為金屬價格上漲，營運資金需求從 12 月 31 日的季節性低餘額擴大。但是，我們確實預計 2023 年將進一步減少債務，主要發生在第二個季度半年。

Consolidated operating expenses totaled $81.6 million for the fourth quarter, a decrease of $8.9 million or 9.9% from the prior year quarter. Fourth quarter 2022 operating expenses included a $9.8 million reduction in performance-based incentive expenses when compared to the fourth quarter of 2021.

第四季度綜合運營費用總計 8160 萬美元，比去年同期減少 890 萬美元或 9.9%。與 2021 年第四季度相比，2022 年第四季度的運營費用包括基於績效的激勵費用減少 980 萬美元。

Capital expenditures for 2022 totaled $19.9 million compared to depreciation of $17.3 million. Many capital expenditure projects were approved during 2022, but long lead times have slowed the utilization of cash and push those projects into 2023. We have a robust capital expenditure plan for 2023 of over $36 million of new equipment and improvements, primarily a combination of automation projects and equipment for organic growth opportunities and higher-margin products.

2022 年的資本支出總計 1990 萬美元，而折舊為 1730 萬美元。許多資本支出項目在 2022 年獲得批准，但較長的交付週期減緩了現金的使用，並將這些項目推遲到 2023 年。我們有一個強有力的 2023 年資本支出計劃，包括超過 3600 萬美元的新設備和改進，主要是自動化的組合有機增長機會和高利潤產品的項目和設備。

Lead times for equipment remain long and we expect actual cash utilized for capital expenditures during the 2023 year to approximate $30 million. Our effective tax rate for the quarter of 2020 -- for the fourth quarter of 2022 was 18.6% compared to 27.4% in the fourth quarter of 2021. The lower tax rate was primarily related to the recognition of higher-than-expected federal and state tax credits on our 2021 corporate tax returns, which were filed during the fourth quarter of 2022. We expect our 2023 effective tax rate to approximate the historic rate of 27% to 28%.

設備的交貨時間仍然很長，我們預計 2023 年用於資本支出的實際現金約為 3000 萬美元。我們 2020 年第四季度的有效稅率 - 2022 年第四季度為 18.6%，而 2021 年第四季度為 27.4%。較低的稅率主要與承認高於預期的聯邦和州有關我們在 2022 年第四季度提交的 2021 年企業納稅申報表的稅收抵免。我們預計 2023 年的有效稅率將接近 27% 至 28% 的歷史稅率。

Looking forward, we are excited to include Metal-Fab in our 2023 results. The $131 million purchase price represents a paid multiple of approximately 6.9x trailing 12-month adjusted EBITDA. During the first quarter of 2023, we expect to record approximately $4 million to $5 million of required GAAP related purchase price expenses and adjustments, primarily expense deal fees, the write-up of inventory to fair market value and the amortization of certain acquired intangible assets.

展望未來，我們很高興將 Metal-Fab 納入我們 2023 年的業績。 1.31 億美元的收購價相當於過去 12 個月調整後 EBITDA 的約 6.9 倍的支付倍數。在 2023 年第一季度，我們預計將記錄大約 400 萬至 500 萬美元的所需 GAAP 相關購買價格費用和調整，主要是費用交易費用、存貨增記至公允市場價值以及某些已收購無形資產的攤銷.

Our reported financial results will begin reflecting the full strength of Metal-Fab's earning power in the second quarter of 2023. And just last week, our Board of Directors approved a 39% increase in our regular quarterly cash dividend to $0.125, up from $0.09 per share. We are pleased to share Olympic Steel's success with our shareholders, and we remain committed to delivering value to all of our stakeholders. We have paid dividends now for 71 consecutive quarters.

我們報告的財務業績將在 2023 年第二季度開始反映 Metal-Fab 盈利能力的全部實力。就在上週，我們的董事會批准將定期季度現金股息增加 39% 至 0.125 美元，高於每股 0.09 美元分享。我們很高興與我們的股東分享 Olympic Steel 的成功，我們將繼續致力於為所有利益相關者創造價值。我們已經連續 71 個季度派發股息。

In closing, I want to add my congratulations to our team for their hard work and accomplishments in 2022, especially during the tumult second half of the year. We remain confident that the strength of our company and our ongoing commitment to our strategy will enable us to continue our resilience and success in all market cycles. Now operator, let's open the call for questions.

最後，我想對我們的團隊在 2022 年的辛勤工作和取得的成就表示祝賀，尤其是在動蕩的下半年。我們仍然相信，我們公司的實力和我們對戰略的持續承諾將使我們能夠在所有市場週期中繼續保持韌性並取得成功。現在接線員，讓我們打開問題電話。

Thank you. (Operator Instructions). Our first question comes from Samuel McKinney with KeyBanc Capital Markets.

謝謝。 （操作員說明）。我們的第一個問題來自 KeyBanc Capital Markets 的 Samuel McKinney。

Decrease in both pricing and volumes in carbon and specialty in the fourth quarter. And thanks, Andrew, for the color earlier. But can you talk us through a little more color on what you're seeing from your major industrial OEMs on the demand side as we're almost through February?

第四季度碳和專業的定價和數量均下降。感謝 Andrew，早先的顏色。但是，在我們快到 2 月份的時候，您能否通過更多的顏色來談談您在需求方面從主要工業原始設備製造商那裡看到的情況？

Yes, sure. Happy to do that, Sam. What we're really seeing is steadiness. The industrial OEMs have been at a pretty good pace, I would say, since the last 12 to 18 months. And they're continuing to remain steady. We see that not only through the first and second quarter, but right now, it looks like through the balance of this year. I think their backlogs are pretty good, but they're having a tough time getting into the backlogs for some of the same supply chain issues that we've been talking about this past 1.5 years to 2 years right now, primarily labor. But they're very steady. They're really hitting at about forecast. And so we're very bullish on where the industrials are going certainly for this year.

是的，當然。很高興這樣做，山姆。我們真正看到的是穩定性。我想說，自過去 12 到 18 個月以來，工業 OEM 的發展速度相當不錯。他們繼續保持穩定。我們不僅在第一季度和第二季度看到了這一點，而且現在，它看起來像是通過今年的餘額。我認為他們的積壓工作非常好，但他們很難解決我們在過去 1.5 到 2 年中一直在討論的一些供應鏈問題，主要是勞動力問題。但是他們很穩。他們真的很關注預測。因此，我們非常看好今年工業行業的發展方向。

Okay. I know you have a pretty heavy contractual book that tends to lag the rise in spot pricing. So from a pricing standpoint in the first quarter, given the rise HRC market, what are you seeing?

好的。我知道你有一份相當沉重的合同書，往往滯後於現貨價格的上漲。因此，從第一季度的定價角度來看，鑑於熱軋卷市場的增長，您看到了什麼？

Well, I think you said it perfectly. So we'll see our spot prices as we have started to rise, and there will be a lag for the contractual business, it will probably take late first quarter into second quarter before we start seeing any changes there. But we've certainly seen the spot numbers starting to rise in the last 2 or 3 weeks.

嗯，我覺得你說的很完美。所以我們會看到現貨價格開始上漲，合同業務會有滯後，可能需要第一季度末到第二季度才能開始看到那裡的任何變化。但我們確實看到現貨數量在過去 2 或 3 週內開始上升。

Okay. And then in '22, you guys did a great job deleveraging cutting the debt almost in half. Can you talk us through what the strategy is in managing those levels in 2023? And how much further you're planning to get in terms of M&A?

好的。然後在 22 年，你們在去槓桿化方面做得很好，幾乎將債務減半。你能告訴我們在 2023 年管理這些級別的策略是什麼嗎？您打算在併購方面走多遠？

Sure, Sam. It's Rich. And I think the focus on inventory really all along has been on inventory turns. And so our inventory levels are going to be set by the demand level of our customers, and we just strive to turn 5 times. And so my comments with respect to debt are that if you look at the future, the future curve would suggest that pricing in the later half of 2023 is less than now, which would mean working capital is less. So you'd expect to see debt come down to the back half as working capital needs decrease.

當然，山姆。這是豐富的。而且我認為對庫存的關注實際上一直都在庫存周轉率上。因此，我們的庫存水平將由客戶的需求水平決定，我們只努力實現 5 倍的周轉率。因此，我對債務的評論是，如果你展望未來，未來曲線將表明 2023 年下半年的定價低於現在，這意味著營運資金較少。因此，隨著營運資金需求的減少，您預計債務會下降到後半部分。

And then with respect to M&A, we remain open to M&A as well as organic growth opportunities. As I mentioned in my comments, even after the Metal-Fab deal with the upsizing of our ABL, we're still looking at availability in excess of $300 million. So we remain open to any opportunities that will help us get into higher-return products.

然後在併購方面，我們仍然對併購和有機增長機會持開放態度。正如我在評論中提到的，即使在 Metal-Fab 處理了我們 ABL 的擴大規模之後，我們仍在尋找超過 3 億美元的可用性。因此，我們對任何有助於我們獲得更高回報產品的機會持開放態度。

Okay. And then last one for me. OpEx was in the 13% range as a percent of sales through the first 9 months of '22. It was closer to 16% in the fourth quarter. Can you talk me through what drove that increase? And what inflationary pressures are leading and which have been more sticky?

好的。然後最後一個給我。 22 年前 9 個月，運營支出佔銷售額的百分比在 13% 左右。第四季度接近 16%。你能告訴我是什麼推動了這種增長嗎？哪些通貨膨脹壓力正在導致，哪些更具粘性？

Sure, Sam, it's Rich. And I think what you're seeing in the fourth quarter is just a seasonally slower sales level. And so you're always going to have a higher percentage of operating expenses in the fourth quarter compared to the other quarters. Year-over-year, we were down about $9 million. And when you kind of adjust out for the incentives that are performance based, we basically saw about a 4% inflation fourth quarter of 2022 versus fourth quarter of 2021. And that's down from what we saw early in the year. We were tracking between 5% and 5.5% for the first 3 quarters of the year. And I think that we still have inflationary pressures on everything. As I always point out to people, there's nothing that you buy today that doesn't cost more than it did a year ago. But I would tell you that, that rate of inflation seems to be decreasing.

當然，Sam，這是 Rich。而且我認為你在第四季度看到的只是季節性放緩的銷售水平。因此，與其他季度相比，第四季度的運營支出比例總是更高。與去年同期相比，我們減少了約 900 萬美元。當你對基於績效的激勵措施進行調整時，我們基本上看到 2022 年第四季度的通貨膨脹率與 2021 年第四季度相比約為 4%。這比我們年初看到的要低。今年前 3 個季度，我們追踪的增長率在 5% 到 5.5% 之間。而且我認為我們在所有方面仍然存在通脹壓力。正如我經常向人們指出的那樣，您今天購買的任何東西都不會比一年前花費更多。但我會告訴你，通貨膨脹率似乎正在下降。

Next question is from Dave Storms with Stonegate.

下一個問題來自 Stonegate 的 Dave Storms。

I'm just wondering if I could start with the demand side. You mentioned demand is still really strong from our OEMs and end markets. Is any of that tied to any of the infrastructure bill that was passed what was that last year? Or is there still, I guess, some dry powder there from the demand side?

我只是想知道我是否可以從需求方開始。您提到我們的原始設備製造商和終端市場的需求仍然非常強勁。其中是否與去年通過的任何基礎設施法案有關？或者，我猜，需求方是否還有一些幹火藥？

No. I think there's probably more dry powder. I don't think we're really seeing the impact yet. Dave, I think the anticipation is that we will and certainly, on the industrial side, they talk about it, but we have not really seen anything to date that would stand out. But the anticipation is certainly as we get into the second half of this year, we'll start seeing some of this indirectly.

不，我認為可能有更多的干粉。我認為我們還沒有真正看到影響。戴夫，我認為我們會而且肯定會在工業方面進行討論，但迄今為止我們還沒有真正看到任何突出的東西。但可以肯定的是，隨著我們進入今年下半年，我們將開始間接地看到其中的一些。

Perfect. And I know you mentioned that you're targeting debt to start decreasing again in the second half of 2023. In the past, you've put that number trying to meter that down to the $200 million level. Is that -- do you think that's going to be your goal again? Or does that goal now shifted with the Metal-Fab acquisition to increase revolver? Or is it still too soon to kind of put a number around that?

完美的。我知道你提到你的目標是在 2023 年下半年再次開始減少債務。過去，你曾試圖將這個數字降至 2 億美元的水平。那是——你認為這會再次成為你的目標嗎？或者這個目標現在隨著 Metal-Fab 的收購而改變以增加左輪手槍？還是現在就給出一個數字還為時過早？

Yes, David, it's Rich. I think it's a little too soon to put a number on that. I think the biggest driver will be what hot-rolled pricing and stainless pricing does here rest of the year. Obviously, right now, the mills have announced a lot of price increases. And depending on where that price ends up at the end of the year kind of compared to where the beginning of the year, that's really going to kind of determine how much of a draw or pay down you have on working capital. So I would tell you, stay tuned. Obviously, it's heavily dependent upon where metal pricing goes rest of the year.

是的，大衛，是里奇。我認為現在給出一個數字還為時過早。我認為最大的推動因素將是今年剩餘時間熱軋定價和不銹鋼定價的變化。顯然，眼下，鋼廠已經宣布大量提價。並且取決於該價格在年底與年初相比的價格，這實際上將決定您在營運資金上有多少提取或支付。所以我會告訴你，敬請期待。顯然，這在很大程度上取決於今年餘下時間的金屬價格走勢。

Perfect. And one more, if I could. I know you touched on inflation already. Last quarter, there was a lot of talk around transportation cost being a big headwind to, especially around diesel pricing with diesel prices starting to come down a little bit quarter-over-quarter. Are we starting to see that abate? And do you think that will drive your inflation expectations even lower, hopefully?

完美的。還有一個，如果可以的話。我知道你已經談到通貨膨脹了。上個季度，關於運輸成本成為一大阻力的討論很多，尤其是關於柴油定價的話題，柴油價格開始環比略有下降。我們開始看到這種減弱了嗎？你認為這會推動你的通脹預期進一步降低嗎？

Yes. So Dave, it's Rich again. So it's too early for me to comment on the first quarter. But what I can tell you is that the fourth quarter, we certainly still saw pressure from transportation expenses. I want to say that on a same volume basis, Q4 '22 is about $1 million more expensive than 4Q of '21. And that again, we saw the prices kind of spike after kind of going down there for a little bit of a lull toward the end of the third quarter.

是的。戴夫，又是里奇。所以我現在評論第一季度還為時過早。但我可以告訴你的是，第四季度，我們當然仍然看到來自運輸費用的壓力。我想說的是，在相同數量的基礎上，22 年第四季度比 21 年第四季度貴約 100 萬美元。再一次，我們看到價格在第三季度末略有下降後出現飆升。

Pricing has come down. So I would be optimistic that will come down, but all the other ancillary things around distribution, primarily labor continue to remain at high levels. And so I wouldn't tell you it's a one for one as the pricing comes down that we still see inflationary pressure on the transportation of all the things we see transportation is probably the biggest area of inflation.

定價已經下降。所以我會樂觀地認為會下降，但圍繞分配的所有其他輔助事物，主要是勞動力繼續保持在高水平。所以我不會告訴你這是一對一的價格下降，我們仍然看到所有東西的運輸通貨膨脹壓力我們看到運輸可能是最大的通貨膨脹領域。

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

（操作員說明）。我們的下一個問題來自奇異研究公司的 Chris Sakai。

I just had a question on the gross margin improvement in Tubular and Pipe and products. What was driving that?

我剛剛對管材和管道產品的毛利率提高有疑問。是什麼推動了它？

Yes, Chris, it's Rich. The one big thing that you have to kind of adjust out of there is LIFO. And so there was a substantial LIFO expense in the fourth quarter of 2021 versus a little bit of LIFO income in the fourth quarter of 2022. I want to say the swing was like $9 million or $10 million. So if you kind of factor that out there, I think, on a percentage basis, it's pretty consistent.

是的，克里斯，是里奇。您必須調整的一件大事是後進先出法。因此，與 2022 年第四季度的後進先出法收入相比，2021 年第四季度有大量後進先出法支出。我想說的是 900 萬美元或 1000 萬美元。所以，如果你把它考慮在內，我認為，在百分比的基礎上，它是非常一致的。

Okay. And as far as geography and vertical goals for any future acquisitions. Can you shed some light there?

好的。以及任何未來收購的地理和垂直目標。你能在那裡闡明一下嗎？

Yes. Sure, Chris, it's Rick. As Rich said earlier, one thing for sure is we're going to remain acquisitive. And I think, as Rich said, just to reiterate, we've got plenty of liquidity to really continue to execute on our growth plans both through CapEx, through acquisitions and through shareholder returns like an increased dividend. Specifically, we'll continue to look.

是的。當然，克里斯，是瑞克。正如 Rich 之前所說，可以肯定的是，我們將繼續收購。我認為，正如 Rich 所說，只是重申一下，我們有足夠的流動性來真正繼續通過資本支出、收購和股東回報（如增加股息）來執行我們的增長計劃。具體的，我們會繼續看。

If you look at our geography, I think Metal-Fab was a perfect example. We've pushed a little further west. I mean that has nothing to do with the product, but in terms of geography. And that's when you look at our map, that's about in terms of physical locations about as far as we reached. So we certainly have a large part of the country kind of to the west of the plain states to grow. Certainly, the Southwest is an area we're actively looking to grow the Texas marketplace and some others.

如果你看看我們的地理位置，我認為 Metal-Fab 就是一個完美的例子。我們已經向西推進了一點。我的意思是這與產品無關，而是在地理方面。當你看我們的地圖時，那是關於我們到達的物理位置。所以我們肯定有很大一部分國家在平原各州的西部發展。當然，西南地區是我們積極尋求發展德克薩斯市場和其他一些市場的地區。

In terms of products, we've mentioned in the past on the specialty metals side, aluminum has been a growth area for us. That's certainly an area we'd look to grow in terms of acquisition and organic growth. And then I think Metal-Fab is a perfect example. What we're really looking to do is to find really good fits for Olympic well-run, high-return companies. And certainly, if we're able to use the strength and power of Olympic Steel in terms of our processing and depth of our relationships in terms of purchasing to add to companies that we acquired, that's very attractive to us. So -- and I think Metal--Fab and what we talked about in terms of some of the commercial synergies is really a great example of that.

在產品方面，我們過去曾在特種金屬方面提到過，鋁一直是我們的增長領域。這當然是我們希望在收購和有機增長方面增長的領域。然後我認為 Metal-Fab 就是一個完美的例子。我們真正想做的是為奧運運營良好、高回報的公司找到真正合適的人選。當然，如果我們能夠利用 Olympic Steel 在加工方面的實力和力量以及我們在採購方面的關係深度來增加我們收購的公司，那對我們來說非常有吸引力。所以——我認為 Metal——Fab 以及我們所討論的一些商業協同效應確實是一個很好的例子。

Can you comment on how valuations are you're seeing for companies?

你能評論一下你對公司的估值嗎？

Yes. I think typically, valuations for service center distribution type businesses are typically in the 7 to 8x EBITDA range based upon, I call it, the cycle average of EBITDA. Rich gave you a little bit of color today on our Metal-Fab acquisition, where we paid a 6.9 multiple on that. So that kind of fit right into that general range. But that's pretty typical, Chris. I think the multiples, given what's happening maybe at a point in time with EBITDA in the cycle and/or financing costs could be a little bit different. But that's the general range we've seen.

是的。我認為通常情況下，服務中心分銷類型企業的估值通常在 7 到 8 倍 EBITDA 範圍內，我稱之為 EBITDA 的周期平均值。 Rich 今天在我們的 Metal-Fab 收購中給了你一些顏色，我們為此支付了 6.9 倍。所以那種適合那個一般範圍。但這很典型，克里斯。我認為，考慮到週期中 EBITDA 和/或融資成本可能在某個時間點發生的情況，倍數可能會有所不同。但這是我們所看到的一般範圍。

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

我們已經結束了問答環節。我現在想將電話轉回給 Rick Marabito 以徵求意見。

Thank you so much, and thank all of you for joining us on the call today. We certainly appreciate your continued interest in Olympic Steel. And I hope through our comments today, you take away how excited we are about 2023 in the future of Olympic Steel. So we certainly look forward to speaking with you again soon. Thank you, and have a good day.

非常感謝，也感謝大家今天加入我們的電話會議。我們非常感謝您對奧林匹克鋼鐵的持續關注。我希望通過我們今天的評論，您能帶走我們對奧林匹克鋼鐵未來 2023 年的興奮之情。因此，我們當然期待很快再次與您交談。謝謝你，有一個美好的一天。

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

今天的會議到此結束。您此時可以斷開線路，我們感謝您的參與。