Olympic Steel Inc (ZEUS) 2023 Q3 法說會逐字稿

Good morning, and welcome to the Olympic Steel 2003 Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. At this time, I would like to hand the conference over to Rich Manson, Chief Financial Officer at Olympic Steel. Please go ahead, sir.

早安，歡迎參加奧林匹克鋼鐵2003年第三季財務業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。這次，我想把會議交給奧林匹克鋼鐵公司財務長里奇‧曼森。請繼續，先生。

Thank you, operator. Welcome to Olympic Steel's earnings call for the third quarter of 2023. 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，接線生。歡迎參加奧林匹克鋼鐵公司 2023 年第三季的財報電話會議。今天上午的電話會議將由我們的執行長 Rick Marabito 主持。我們的總裁兼營運長 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.

在我們開始之前，我有一些提醒。今天的電話會議上所做的一些陳述將是預測性的，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陳述，可能不會反映實際結果。

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.

該公司不承諾更新此類聲明、假設的變更或影響此類前瞻性聲明的其他因素的變更。本公司 10-K 和 10-Q 表格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.

在今天的討論中，我們可能會提到調整後每股攤薄淨利潤、EBITDA 和調整後 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公認會計準則指標與最直接可比較的公認會計準則財務指標的調節表，並且可以在我們的網站上找到。

Today's live broadcast will be archived and available for replay on Olympic Steel's website.

今天的直播將存檔並可在奧林匹克鋼鐵網站上重播。

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

這時候，我會把電話轉給里克。

Thank you, Rich, and good morning, everyone. Thank you for joining us today to discuss Olympic Steel's 2023 third quarter results. I'll begin with an overview of the quarter, then Andrew will review our segment performance and provide additional insight on market conditions and our latest acquisition. 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，大家早安。感謝您今天加入我們討論奧林匹克鋼鐵 2023 年第三季業績。我將首先概述本季度，然後安德魯將回顧我們的部門業績，並提供有關市場狀況和我們最新收購的更多見解。接下來，里奇將更詳細地討論我們的財務表現。然後，像往常一樣，我們將打開電話詢問您的問題。

Olympic Steel's performance in a challenging third quarter demonstrates the benefits of our actions to deliver more consistent results in all environments. All 3 of our segments were profitable, led by our pipe and tube business, which recorded 1 of its most profitable quarters ever, and strong results from our carbon segment. We accomplished this while navigating several significant challenges during the quarter. Pressure on metal pricing continued, with the declines accelerating in the back half of the quarter. These pressures were caused by added macroeconomic uncertainty, the UAW strike and the threat of further interest rate hikes, leading to softer-than-anticipated volumes across the industry.

奧林匹克鋼鐵公司在充滿挑戰的第三季的表現證明了我們在所有環境下提供更一致結果的行動所帶來的好處。我們的所有 3 個部門均實現盈利，其中以管材業務為首，該業務創下了有史以來利潤最高的季度之一，碳部門也取得了強勁業績。我們在本季度克服了幾個重大挑戰的同時實現了這一目標。金屬價格持續承壓，本季後半段跌幅加速。這些壓力是由宏觀經濟不確定性增加、UAW罷工和進一步升息的威脅造成的，導致整個行業的銷售低於預期。

Despite these headwinds, we reported third quarter sales of $526 million, with net income of $12.2 million and EBITDA of $27.1 million.

儘管有這些不利因素，我們報告第三季銷售額為 5.26 億美元，淨利潤為 1,220 萬美元，EBITDA 為 2,710 萬美元。

The integration of our Metal-Fab business, which was acquired at the beginning of the year, continues, and we're excited about the impact this addition is having on our results. We are beginning to see benefits from our supply chain synergies and expect full integration of the Metal-Fab supply chain into our operations by the start of 2024.

今年年初收購的 Metal-Fab 業務的整合仍在繼續，我們對這項業務對我們業績的影響感到興奮。我們開始看到供應鏈綜效帶來的好處，並預計到 2024 年初，Metal-Fab 供應鏈將完全整合到我們的營運中。

Since completing the acquisition of Metal-Fab in January of this year, we have had strong cash flow and continue to reduce our debt, which Rich will detail later.

自今年 1 月完成收購 Metal-Fab 以來，我們擁有強勁的現金流，並持續減少債務，Rich 稍後將詳細介紹這一點。

Our strong balance sheet provides us with capital to pursue higher return investment opportunities, including additional attractive acquisitions. We capitalized on this with the acquisition of Central Tube and Bar, who we refer to as CTB, on October 2, 2023, and that marked our seventh acquisition in the past 6 years.

我們強大的資產負債表為我們提供了資本來追求更高回報的投資機會，包括額外有吸引力的收購。我們利用這一點於 2023 年 10 月 2 日收購了 Central Tube and Bar（我們稱之為 CTB），這是我們過去 6 年來第七次收購。

CTB is exactly the type of company we want to acquire. CTB is well run. It's a growing organization, delivering high returns and consistent performance, and it's an excellent cultural fit. We believe their high-value contract manufacturing capabilities and geographic coverage in the South Central U.S. complement our offerings and expand our reach. We're excited to welcome the CTB team to the Olympic Steel family, and look forward to their contributions to our pipe and tube segment.

CTB 正是我們想要收購的公司類型。 CTB 運作良好。這是一個不斷發展的組織，提供高回報和一致的績效，並且具有極好的文化契合度。我們相信他們的高價值合約製造能力和在美國中南部的地理覆蓋範圍補充了我們的產品並擴大了我們的業務範圍。我們很高興歡迎 CTB 團隊加入奧林匹克鋼鐵大家庭，並期待他們為我們的管道領域做出貢獻。

In addition to strategic investments, we continue to bolster the Olympic Steel team. In October, we welcomed George Frost as our Director of National Sales-Aluminum. In this role, George will support the growth of Olympic Steel's specialty metals business segment with a focus on aluminum products and processing, a key element of our strategic growth plan.

除了策略投資之外，我們也持續加強奧林匹克鋼鐵團隊的實力。十月，我們迎來了喬治·弗羅斯特 (George Frost) 擔任我們的全國鋁銷售總監。在此職位上，喬治將支持奧林匹克鋼鐵公司特種金屬業務部門的發展，並專注於鋁產品和加工，這是我們策略性成長計畫的關鍵要素。

We also announced the promotion of Leah Kiley to the role of General Manager for Olympic Steel's Minneapolis plate processing facility. Leah has been with Olympic since 2012 in different roles of growing responsibility, and she's been instrumental in the commercial success and continued growth of our Minnesota and Iowa operations.

我們也宣布晉升 Leah Kiley 擔任 Olympic Steel 明尼阿波利斯板材加工工廠的總經理。自 2012 年以來，Leah 一直在 Olympic 工作，擔任過不同的職務，職責不斷擴大，她對我們明尼蘇達州和愛荷華州業務的商業成功和持續增長發揮了重要作用。

As we grow and invest in our business, we remain committed to rewarding our shareholders. We continue to pay our quarterly dividend rate of $0.125 per share, which allows our shareholders to directly benefit from our consistent financial performance.

隨著我們業務的發展和投資，我們仍然致力於回報股東。我們繼續支付每股 0.125 美元的季度股息，這使我們的股東能夠直接從我們穩定的財務表現中受益。

Before I turn the call over to Andrew, I would like to share a few thoughts on our outlook. As we close out another solid year, we remain optimistic about the long-term outlook for the U.S. steel market and our business. We are seeing a rebound in pricing, along with continued industrial backlogs, OEM outsourcing of fabrication work and anticipated infrastructure spending. These dynamics, together with our ongoing efforts to invest in higher-return opportunities, will enable us to drive additional profitable growth in 2024, including the active pursuit of acquisitions.

在將電話轉給安德魯之前，我想分享一些關於我們前景的想法。隨著另一個堅實的一年的結束，我們對美國鋼鐵市場和我們業務的長期前景仍然樂觀。我們看到價格反彈，以及持續的工業積壓、製造工作的 OEM 外包以及預期的基礎設施支出。這些動態，加上我們持續努力投資更高回報的機會，將使我們能夠在 2024 年推動額外的利潤成長，包括積極尋求收購。

I have full confidence that Olympic Steel is strategically positioned to deliver consistently improving results and stronger profitability regardless of the market's challenges. Andrew?

我完全相信，奧林匹克鋼鐵公司的策略定位是，無論市場面臨怎樣的挑戰，都能實現持續改善的業績和更強的獲利能力。安德魯？

Thank you, Rick, and good morning, everyone. Olympic Steel continued to build on the strong first half of the year and the third quarter. As Rick noted, we earned EBITDA of $27.1 million despite market challenges. This performance was driven by the dedication of the entire Olympic Steel team to deliver on our operating disciplines as well as the significant progress we have made to diversify our business by investing in higher return growth opportunities.

謝謝你，瑞克，大家早安。奧林匹克鋼鐵公司在上半年和第三季的強勁表現基礎上持續發展。正如 Rick 指出的那樣，儘管面臨市場挑戰，我們的 EBITDA 仍達到 2,710 萬美元。這項業績的推動因素是整個奧林匹克鋼鐵團隊致力於履行我們的營運紀律，以及我們透過投資更高回報的成長機會在業務多元化方面取得的重大進展。

Our pipe and tube business delivered EBITDA of $11.8 million, which included $2 million of LIFO income. This represents the segment's fifth most profitable quarter in its history. The pipe and tube team's focus on margin improvement and fabricated growth is driving positive results, and we expect this performance to continue as we close out 2023.

我們的管材業務實現 EBITDA 1,180 萬美元，其中包括 200 萬美元的 LIFO 收入。這是該部門歷史上第五個最賺錢的季度。管材團隊對利潤率改善和製造成長的關注正在推動積極的業績，我們預計這種業績將在 2023 年結束時繼續下去。

Additionally, as Rick mentioned, we acquired CTB at the start of the fourth quarter, which will be included in our pipe and tube segment results going forward. We are excited to integrate this business and begin fully realizing the benefits of the growth opportunities. CTB is expected to be immediately accretive and drive additional margin expansion.

此外，正如 Rick 所提到的，我們在第四季度初收購了 CTB，這將包含在我們未來的管道和管材部門業績中。我們很高興能夠整合該業務並開始充分實現成長機會的好處。 CTB 預計將立即增值並推動利潤率進一步擴大。

To provide additional context, CTB's historical financial performance has consistently exceeded our tubular and pipe product returns, which has typically yielded the highest EBITDA to sales margins of our segments. Our pipe and tube business is positioned as an innovative industry leader. We have excellent product breadth and high-end fabrication capabilities, including tube laser processing equipment, which we believe is among the best and largest capacity in the entire industry.

為了提供更多背景信息，CTB 的歷史財務業績一直超過我們的管材和管材產品回報，而管材和管材產品的回報通常為我們部門的銷售利潤率帶來最高的 EBITDA。我們的管道業務定位為創新產業領導者。我們擁有出色的產品範圍和高端製造能力，包括管雷射加工設備，我們相信這些設備是整個行業中最好和最大的產能之一。

The CTB acquisition, which includes locations in Arkansas and Oklahoma, will allow us to grow in the South and South Central U.S.

CTB 收購包括阿肯色州和俄克拉荷馬州的工廠，這將使我們能夠在美國南部和中南部發展。

Now turning to our carbon segment. Carbon delivered $13.5 million of EBITDA for the quarter despite facing numerous market challenges. Hot-rolled pricing continued to fall, declining further 24% during the quarter and bringing the total decline to nearly 45% since pricing peak back in April. These declines accelerated during the quarter due to increased market uncertainty stemming from the looming UAW strike. This pricing environment drove changes in customer buying patterns and led to lower volume shift, especially spot transaction sales.

現在轉向我們的碳部分。儘管面臨許多市場挑戰，Carbon 本季仍實現了 1,350 萬美元的 EBITDA。熱軋價格持續下跌，本季進一步下跌 24%，自 4 月價格高峰以來總跌幅接近 45%。由於UAW罷工迫在眉睫，市場不確定性增加，導致本季下降速度加快。這種定價環境推動了客戶購買模式的變化，並導致銷售變化減少，尤其是現貨交易銷售。

Navigating these challenges to ultimately deliver stronger profitability than the same quarter last year is a true testament to the hard work and dedication of the entire carbon team. Through disciplined inventory management, the expansion of our value-added product offerings and the streamlining of our fabrication business, the carbon business has been able to achieve more consistent profitability.

克服這些挑戰並最終實現比去年同期更高的盈利能力，是整個碳團隊辛勤工作和奉獻精神的真實證明。透過嚴格的庫存管理、增值產品供應的擴展以及製造業務的精簡，碳業務已能夠實現更穩定的獲利能力。

In addition, Metal-Fab has had a positive impact on our results as the business is performing well. The integration of this business has been seamless, and we expect to realize additional supply chain synergies in the coming quarters.

此外，由於業務表現良好，Metal-Fab 對我們的業績產生了積極影響。該業務的整合是無縫的，我們預計在未來幾季實現額外的供應鏈協同效應。

Specialty metals posted a profitable quarter with EBITDA of $5.5 million as this segment continued to face industry-wide headwinds from falling stainless and aluminum pricing. The team continues to focus on what they can control and worked hard this quarter to reduce inventory levels. Our steady growth in aluminum was a bright spot in this segment, and the addition of George Frost will further accelerate our efforts. The resiliency of our team in the face of ongoing market challenges continues to make a difference.

特種金屬季度獲利，EBITDA 為 550 萬美元，因為該細分市場繼續面臨不銹鋼和鋁價格下跌帶來的全行業阻力。團隊繼續專注於他們可以控制的事情，並在本季度努力降低庫存水準。我們鋁業務的穩定成長是該領域的亮點，喬治·弗羅斯特的加入將進一步加速我們的努力。面對持續的市場挑戰，我們團隊的彈性持續發揮作用。

The actions we have taken to deliver more consistent results are reflected in our performance across the company. While headwinds remain, we are seeing a rebound in pricing, and we remain optimistic about the long-term outlook for the U.S. steel market and Olympic Steel.

我們為提供更一致的結果而採取的行動反映在我們整個公司的績效中。儘管逆風依然存在，但我們看到定價反彈，我們對美國鋼鐵市場和奧林匹克鋼鐵的長期前景仍然樂觀。

Now I'll turn the call over to Rich.

現在我將把電話轉給 Rich。

Thank you, Andrew. It was another profitable quarter for Olympic Steel and 1 that reflects our ongoing investment in our company and strong operational disciplines.

謝謝你，安德魯。這是奧林匹克鋼鐵公司又一個有利可圖的季度，這反映了我們對公司的持續投資和強大的營運紀律。

As we review our third quarter 2023 results, keep in mind that year-over-year comparisons will be more difficult due to the January 2023 acquisition of Metal-Fab, whose results roll up through our carbon segment.

當我們回顧 2023 年第三季業績時，請記住，由於 2023 年 1 月收購了 Metal-Fab，因此同比比較將更加困難，Metal-Fab 的業績透過我們的碳部門匯總。

For the quarter, net income totaled $12.2 million compared to $12 million in the third quarter of 2022. EBITDA in the quarter was $27.1 million, compared with $23.8 million in the prior year period.

本季淨利潤總計 1,220 萬美元，而 2022 年第三季為 1,200 萬美元。本季 EBITDA 為 2,710 萬美元，而去年同期為 2,380 萬美元。

Third quarter 2023 results include $2 million of LIFO pretax income and $4 million of pretax income from the employee retention credit under the CARES Act, compared with $1.5 million of LIFO pretax expense in the same period a year ago.

2023 年第三季的業績包括 200 萬美元的 LIFO 稅前收入和 400 萬美元的來自 CARES 法案下的員工保留信貸的稅前收入，而去年同期的 LIFO 稅前費用為 150 萬美元。

Consolidated operating expenses for the third quarter totaled $91 million compared to $87.9 million in the third quarter of 2022.

第三季的綜合營運費用總計 9,100 萬美元，而 2022 年第三季的綜合營運費用為 8,790 萬美元。

Our operating expenses for the third quarter of 2023 totaled 17.3% of sales and $352 per ton versus 13.9% of sales and $336 per ton for the same period in the prior year.

我們 2023 年第三季的營運費用總計佔銷售額的 17.3%，每噸 352 美元，而去年同期為銷售額的 13.9%，每噸 336 美元。

Our third quarter and year-to-date operating expenses reflect the addition of Metal-Fab, which does not report tons sold. Therefore, operating expenses per ton at the consolidated level, and for the carbon segment, will appear higher year-over-year.

我們第三季和年初至今的營運支出反映了 Metal-Fab 的增加，該公司沒有報告銷售量。因此，碳部門的綜合水準每噸營運費用將較去年同期上升。

Consolidated operating expenses for the third quarter included $10.6 million of Metal-Fab operating expenses, $2.2 million of lower variable incentive expense and $4 million of employee retention credit when compared to the third quarter of 2022. Inflationary pressures on operating expenses during the third quarter of 2023 were negligible.

與 2022 年第三季相比，第三季的合併營運費用包括 1,060 萬美元的 Metal-Fab 營運費用、220 萬美元的較低可變激勵費用以及 400 萬美元的員工保留信貸。2023 年可以忽略不計。

As Rick mentioned earlier, we acquired CTB on October 2 for $37.8 million, which is approximately a 5x multiple of trailing 12-month EBITDA. We have previously disclosed trailing 12-month sales of approximately $40 million, which represents an EBITDA to sales margin of approximately 19.5%.

正如 Rick 之前提到的，我們在 10 月 2 日以 3780 萬美元收購了 CTB，大約是過去 12 個月 EBITDA 的 5 倍。我們先前揭露的過去 12 個月銷售額約為 4,000 萬美元，這意味著 EBITDA 與銷售利潤率約為 19.5%。

CTB results will be included in our pipe and tube segment for the fourth quarter of 2023, and will include approximately $700,000 of expense deal costs and $150,000 of inventory fair market value write-up amortization. We expect to see the full earnings power of CTB in our first quarter 2024 results.

CTB 業績將納入我們 2023 年第四季的管道和管材部門，並將包括約 70 萬美元的費用交易成本和 15 萬美元的庫存公平市場價值攤銷。我們預計將在 2024 年第一季的業績中看到 CTB 的全部獲利能力。

Prior to the CTB acquisition, we had reduced debt by $41 million during the third quarter of 2023, bringing our total debt at the end of the quarter to $197 million. Cumulatively, since the $131 million Metal-Fab acquisition in January 2023, we have reduced debt by $100 million.

在收購 CTB 之前，我們在 2023 年第三季減少了 4,100 萬美元的債務，使季度末的總債務達到 1.97 億美元。自 2023 年 1 月以 1.31 億美元收購 Metal-Fab 以來，我們累積減少了 1 億美元的債務。

Immediately following the acquisition of CTB on October 2, our total debt under the revolving credit facility was approximately $234 million, with availability of approximately $359 million. This financial flexibility puts us in an excellent position to continue to invest in our business and pursue additional strategic acquisition opportunities that align with our strategy to strengthen and diversify Olympic Steel.

10 月 2 日收購 CTB 後，我們的循環信貸安排下的總債務約為 2.34 億美元，可用金額約為 3.59 億美元。這種財務靈活性使我們處於有利地位，可以繼續投資我們的業務並尋求與我們加強奧林匹克鋼鐵並使之多元化的戰略相一致的額外戰略收購機會。

Capital expenditures totaled $19.6 million through the third quarter of 2023 compared to depreciation of $15.3 million. Large 2023 capital projects include our Bartlett, Illinois, fabrication expansion, the addition of new pipe and tube lasers, the addition of high-speed flat product lasers and welding automation equipment. We estimate the 2023 capital expenditures will be approximately $25 million to $30 million.

截至 2023 年第三季度，資本支出總計 1,960 萬美元，而折舊額為 1,530 萬美元。 2023 年大型資本項目包括我們在伊利諾州巴特利特的製造擴建、增加新的管道和管材雷射、增加高速扁平產品雷射和焊接自動化設備。我們預計 2023 年的資本支出約為 2,500 萬至 3,000 萬美元。

Our third quarter 2023 effective income tax rate was 27.7%, compared to 25% in the third quarter of 2022. We expect our effective tax rate for the full year of 2023 to be approximately 28% to 29%. Also, during the quarter, we paid our quarterly dividend of $0.125 per share. Our Board of Directors approved a $0.125 per share dividend, which is payable on December 15 to shareholders as of December 1.

我們2023年第三季的有效所得稅率為27.7%，而2022年第三季為25%。我們預計2023年全年的有效稅率約為28%至29%。此外，在本季度，我們支付了每股 0.125 美元的季度股息。我們的董事會批准了每股 0.125 美元的股息，將於 12 月 15 日向截至 12 月 1 日的股東支付。

We have now paid dividends to our shareholders for 74 consecutive quarters.

我們現已連續 74 個季度向股東支付股利。

As we demonstrated in the third quarter, even when we face economic and market headwinds, we're able to deliver consistent results and invest in our business, both through organic growth and acquisition. Looking forward, we are committed to continue growing our business and rewarding our shareholders. Now, operator, please open the call for questions.

正如我們在第三季所展示的那樣，即使我們面臨經濟和市場逆風，我們也能夠透過有機成長和收購來提供一致的業績並投資於我們的業務。展望未來，我們致力於繼續發展我們的業務並回報我們的股東。現在，接線員，請打開電話提問。

(Operator Instructions) And our first question comes from Samuel McKinney with KeyBanc Capital Markets.

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

I'll just start with a quick housekeeping question on that $4 million in CARES Act money. How did that adjustment flow through on a segment level basis?

首先，我先簡單地問一個有關 CARES 法案中 400 萬美元資金的管理問題。這種調整是如何在細分市場層面進行的？

Sure, Sam. It's Rich. So on a rough basis, you can put -- it's about $0.5 million on the [ZEUS] cost center, $0.5 million on specialty and then $3 million on carbon. It did not impact the pipe and tube segment.

當然，薩姆。這是富有的。因此，粗略地說，您可以將 - [ZEUS] 成本中心大約 50 萬美元，專業成本中心 50 萬美元，然後碳成本中心 300 萬美元。它沒有影響管道和管段。

Great. And then moving to the pipe and tube segment, I mean, another quarter with gross margin above 30%. The first quarter used to be the strong quarter with the rebates, but now you guys are just posting 30% every quarter. How much of that margin profile is attributed to the fabrication outsourcing work you continue to add from customers? And how much more runway do you see for that business with the additional laser capabilities you've added at CTB?

偉大的。然後轉向管道和管材領域，我的意思是，另一個季度的毛利率超過 30%。第一季曾經是回扣最強勁的季度，但現在你們每季只回扣30%。該利潤率中有多少歸因於您繼續向客戶添加的製造外包工作？您認為透過 CTB 添加的額外雷射功能，該業務還有多少跑道？

So thanks, Sam. This is Andrew. We continue to see the rise with the pipe and tube division. They're doing an incredible job. Their focus has been to continue to grow the value-added part of the business. That's going to continue. And you'll see -- with CTB, you're certainly going to see that continue to rise, and it's their objective. And so I expect that on a quarter-over-quarter basis, you're going to continue to see, for the foreseeable future, a margin percentage that's going to continue to grow because of that.

所以謝謝，山姆。這是安德魯。我們繼續看到管道和管材部門的成長。他們正在做著令人難以置信的工作。他們的重點是繼續發展業務的增值部分。這種情況將會持續下去。你會看到——透過 CTB，你肯定會看到這一數字繼續上升，這就是他們的目標。因此，我預計，在可預見的未來，按季度計算，您將繼續看到利潤率將因此繼續增長。

Okay. And then hot-rolled pricing, it fell pretty steadily over the course of the third quarter. It's recovered some since the start of October. You're more weighted to contract versus spot, but how are you thinking about the carbon flat segment pricing as we head through the end of the year, given the seasonal volume effect the business will probably experience?

好的。然後熱軋價格在第三季穩步下降。自十月初以來，已經有所恢復。與現貨相比，您更重視合同，但考慮到業務可能會經歷的季節性銷售影響，您如何看待年底前的碳扁平細分市場定價？

Well, great question. So I would tell you that we saw a little bit of a change that kind of go from last year to this year. So we saw a 50% drop second half last year based off of the index price. This year, that really started in April. We saw in April through October drop equaling about the same, not quite 50%, but right around there. As you saw the mills, domestic mills had a number of announcements over the last 4 weeks. They are now into the market. And while we'll see seasonally adjusted volume down Q3 versus Q4 -- or opposite, we think that pricing is going to start to come up. We see that a number of our customers, especially on the transactional side, who thought that the market was going to continue to stay lower, are now starting to jump in. And even though our contract business, you're right. It's more on a fixed basis, we'll still see a little bit of an increase as we come through the fourth quarter.

嗯，很好的問題。所以我想告訴你們，從去年到今年我們看到了一些改變。因此，我們看到去年下半年指數價格下跌了 50%。今年，這件事真正從四月開始。我們看到 4 月到 10 月的跌幅大致相同，雖然不完全是 50%，但也差不多在這個水平。正如您所看到的鋼廠，國內鋼廠在過去 4 週內發布了許多公告。他們現在已進入市場。雖然我們會看到第三季經季節性調整的銷售量比第四季有所下降，或者相反，但我們認為定價將開始上升。我們看到，我們的許多客戶，特別是交易方面的客戶，原本認為市場將繼續走低，但現在開始加入進來。即使我們的合約業務，你是對的。它更多地是在固定的基礎上，當我們進入第四季度時，我們仍然會看到一點增長。

And I would think that pricing is going to continue to rise, certainly into the first quarter and probably going into going into Q1.

我認為定價將繼續上漲，肯定會持續到第一季度，甚至可能持續到第一季。

Okay. And then lastly for me, with more than $350 million still left on the revolver, can you just talk through what you'd like to see in a potential next M&A opportunity? It sounds like you're really focused on that. Still looking to target maybe the Southern United States?

好的。最後，我還剩下超過 3.5 億美元的資金，您能談談您希望在下一次潛在的併購機會中看到什麼嗎？聽起來你真的很專注於此。仍然希望瞄準美國南部嗎？

Yes, Sam, it's Rick. We're excited to continue to grow through a balanced approach of internal investments and acquisitions. I think if you look at our track record, in terms of the types of companies that we've purchased, I think it's a good indicator of what we're going to do going forward. So yes, we like the geographic expansion into some of the areas where we don't have our higher density. So certainly, the midsouth, southwest are areas for growth. And most importantly, I think it's continuing to find those right companies for Olympic strategy. Those are well-run companies with high returns, where, hopefully, we have some synergistic benefits from Olympic Steel that we can add to those entities.

是的，山姆，我是瑞克。我們很高興能夠透過內部投資和收購的平衡方式繼續發展。我認為，如果你看看我們的過往記錄，就我們購買的公司類型而言，我認為這是我們未來要做什麼的一個很好的指標。所以，是的，我們喜歡將地理擴張到一些我們沒有較高密度的地區。所以毫無疑問，中南部、西南部是成長的地區。最重要的是，我認為它正在繼續尋找適合奧運策略的公司。這些都是經營良好、回報率高的公司，希望我們能從奧林匹克鋼鐵公司獲得一些協同效益，並將其添加到這些實體中。

So whether they're companies like CTB or Metal-Fab, I think those are great examples. And the pipeline is -- it's good, it's strong. And so we continue to look to grow in 2024 through acquisition.

因此，無論是 CTB 還是 Metal-Fab 這樣的公司，我認為這些都是很好的例子。管道是——它很好，很強大。因此，我們繼續尋求在 2024 年透過收購實現成長。

Our next question comes from Dave Storms with Stonegate.

我們的下一個問題來自 Stonegate 的 Dave Storms。

Just hoping we can start with the CTB acquisition. Any sense of what kind of synergies you could see that could maybe boost their run rate, boost your operations internally? Just any complementary aspects of that acquisition that you could lay out for us?

只是希望我們能夠從 CTB 收購開始。您是否知道什麼樣的協同效應可能會提高他們的運作率，促進您的內部營運？您可以為我們介紹一下此次收購的任何補充方面嗎？

Yes. Well, there's definite synergies. There's like equipment and tube lasers, areas that we want to continue to grow. And so some pretty good sophisticated equipment. We love the area in Oklahoma and in Arkansas, terrific places for us to be. There is some layer already of customers that we're doing business with right now, and feel we'll be able to certainly have greater offerings to new customers and existing customers. So the combination, I think, is going to be terrific for us.

是的。嗯，確實存在協同效應。我們希望在設備和管雷射等領域繼續發展。還有一些非常好的精密設備。我們喜歡俄克拉荷馬州和阿肯色州的地區，這對我們來說是很棒的地方。我們現在已經有一些客戶在與之開展業務，我們認為我們肯定能夠為新客戶和現有客戶提供更多的產品。因此，我認為這種結合對我們來說將是非常棒的。

Understood. Very helpful. And then just around specialty metal, any sense of where pricing kind of goes from here? Any finger in the wind thoughts on how that market changes from a demand or pricing standpoint?

明白了。很有幫助。然後就特種金屬而言，您對定價的走向有什麼感覺嗎？從需求或定價的角度來看，您對市場如何變化有任何想法嗎？

Yes. It's a great question. I'd tell you there was a lot of heavy inventory as we came into the first half of the year, did a better job, and I think it's an industry-wide issue that I think the inventory levels have started to come down, so more in line with what we want to see. As I look at the prognosticators relative to nickel and aluminum, it's really a mixed bag going into next year. Nickel prices, there's some indication it's going to start coming up a little bit, aluminum kind of steady. And obviously, that's important for us. But what we're really focused on is inventory control. And so we've done a great job in reducing some of the overhang and now in a much balanced -- much more balanced situation today.

是的。這是一個很好的問題。我想告訴你，今年上半年我們的庫存量很大，做得更好，我認為這是一個全行業的問題，我認為庫存水準已經開始下降，所以更符合我們希望看到的。當我審視與鎳和鋁相關的預測時，明年的情況確實是好壞參半。有跡象顯示鎳價將開始小幅上漲，鋁價則保持穩定。顯然，這對我們很重要。但我們真正關注的是庫存控制。因此，我們在減少一些懸而未決方面做得很好，現在的情況更加平衡。

Understood. That's very helpful. And then just 1 more from me, if I could. Just around all the UAW impacts, are you seeing any ripple effects into the Olympic Steel labor force outside of, obviously, everything that's going on with the UAW?

明白了。這非常有幫助。如果可以的話，我還可以再發一份。就所有 UAW 的影響而言，除了 UAW 發生的一切之外，您是否看到了對奧林匹克鋼鐵勞動力的任何連鎖反應？

No, not really. I mean, I think you know that we did have a pretty large presence in Detroit up until September of 2021. So we sold that Detroit operation. So in terms of our labor force and kind of the intersection with the auto unions, we're really not in that market. So we really haven't seen any impact on that.

不，不是真的。我的意思是，我想您知道，截至 2021 年 9 月，我們在底特律確實擁有相當大的業務。因此，我們出售了底特律業務。因此，就我們的勞動力以及與汽車工會的交集而言，我們確實不在那個市場中。所以我們確實沒有看到任何影響。

Our next question comes from Chris Sakai with Singular Research.

我們的下一個問題來自 Singular Research 的 Chris Sakai。

Just wanted a question on CTB. When do you expect it to be fully integrated?

只是想問一個關於 CTB 的問題。您預計它什麼時候能夠完全整合？

Yes. So Chris, it's Rick. Typically, in terms of the integration, this 1 is really an easy one. CTB is really a tremendous fit for our CTI pipe and tube operation. So we really think the integration goes very quickly. From a pure accounting standpoint, we'll have some of the acquisition costs and purchase accounting costs that we normally have in the fourth quarter.

是的。克里斯，是瑞克。通常，就整合而言，這 1 確實是一個簡單的整合。 CTB 確實非常適合我們的 CTI 管道和管材操作。所以我們確實認為整合進展得非常快。從純粹的會計角度來看，我們通常會在第四季產生一些收購成本和購買會計成本。

So if you're really looking for the true run rate of CTB to hit our earnings, I'd say that's first quarter. But they're off to a great start in their first month with us from an operating standpoint. And I think, as always, we'll likely in the fourth quarter in our EBITDA reconciliation, we'll highlight for everybody what the purchase accounting costs and allocations are.

因此，如果您確實希望 CTB 的真實運行率能夠達到我們的收益，我會說這是第一季。但從營運的角度來看，他們在與我們合作的第一個月就取得了良好的開端。我認為，與往常一樣，我們可能會在第四季度的 EBITDA 調節中，向大家強調採購會計成本和分配是什麼。

Okay. And can you talk about -- I know you previously mentioned inventory levels. Do you plan to reduce them even more? And the same with the debt?

好的。你能談談——我知道你之前提到過庫存水準。您打算進一步減少它們嗎？債務也一樣嗎？

So Chris, it's Rich. And so what we're seeing here with the bottoming of pricing kind of happening in October -- September, October, was that contract season kind of moved up for us about a month earlier than normal. And so what I actually think you'll see is you'll see actually inventories rise as we bring inventory in during the first quarter -- or fourth quarter to support first quarter and second quarter sales. And so my anticipation is that you'll see inventory levels up.

克里斯，是里奇。因此，我們在這裡看到的價格觸底發生在 10 月——9 月、10 月，我們的合約季節比正常情況提前了大約一個月。因此，我實際上認為您會看到，隨著我們在第一季或第四季度引入庫存以支持第一季和第二季的銷售，您會看到實際庫存增加。因此，我的預期是庫存水準會上升。

From a debt standpoint, I think what you see is working capital tends to drain toward the end of the year, and that's certainly true for accounts receivable. But I think that with the increase in inventory, I think it's going to be a pretty negligible amount 1 way or the other for debt in the fourth quarter.

從債務的角度來看，我認為您所看到的是營運資金往往會在年底耗盡，對於應收帳款來說當然也是如此。但我認為，隨著庫存的增加，我認為第四季的債務金額可以忽略不計。

And then 1 other question. It looks like there was an increase in intangible assets. What is that?

然後還有另外 1 個問題。看來無形資產增加了。那是什麼？

It was probably -- I'm not sure what period you're looking at. But Rich, I would assume it's for the Metal-Fab...

這可能是——我不確定你看到的是哪個時期。但是 Rich，我認為這是為 Metal-Fab 準備的…

Yes. The last increase, yes, you should have seen was in the first quarter, Chris, and that was the Metal-Fab acquisition. So you had a substantial amount of intangibles and goodwill brought on the books in the first quarter.

是的。克里斯，是的，你應該看到最後一次成長是在第一季度，那就是 Metal-Fab 的收購。因此，第一季帳面上有大量無形資產和商譽。

(Operator Instructions)

（操作員說明）

Okay. I think we've cleared all the questions. So thank you, operator. And I want to thank everybody for joining us on our call this morning. We certainly appreciate your continued interest in Olympic Steel, and we look forward to speaking with you again next quarter. Have a good day, everybody. Thank you.

好的。我想我們已經解決了所有問題。謝謝你，接線生。我要感謝大家今天早上參加我們的電話會議。我們當然感謝您對奧林匹克鋼鐵的持續關注，我們期待下個季度再次與您交談。祝大家有美好的一天。謝謝。

This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。