Olympic Steel Inc (ZEUS) 2024 Q2 法說會逐字稿

Good morning, and welcome to the Olympic Steel 2024 second-quarter financial results conference call.

早安，歡迎參加奧鋼2024年第二季財務業績電話會議。

(Operator Instructions) Please note, this conference is being recorded.

（操作員說明）請注意，本次會議正在錄製中。

At this time, I would like to hand the conference call over to Rich Manson, Chief Financial Officer at Olympic Steel.

現在，我想將電話會議交給奧林匹克鋼鐵公司財務長里奇‧曼森(Rich Manson)。

Please go ahead, sir.

請繼續，先生。

Thank you, operator.

謝謝你，接線生。

Welcome to Olympic Steel's earnings call for the second quarter of 2024.

歡迎參加奧林匹克鋼鐵 2024 年第二季財報電話會議。

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.

今天早上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.

在我們開始之前，我有一些提醒。

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.

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.

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。

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.

本公司向美國證券交易委員會提交的 10-K 表格和 10-Q 表格報告以及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.

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。

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.

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 the 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.

謝謝你，里奇，大家早安。

Thank you for joining us today to discuss Olympic Steel's 2024 second quarter results.

感謝您今天加入我們討論奧林匹克鋼鐵 2024 年第二季業績。

I'll begin by summarizing our results for the second quarter, how all three of our segments delivered profitable results despite a challenging pricing environment.

首先，我將總結我們第二季的業績，以及我們的所有三個部門如何在充滿挑戰的定價環境下獲利。

And I'll talk about how our diversified offerings and end products, a richer higher-margin mix of flat rolled products and additional fabrication capabilities are all helping to drive that profitability.

我將討論我們的多元化產品和最終產品、更豐富的高利潤平板軋製產品組合以及額外的製造能力如何有助於推動獲利能力。

Andrew will then review our segment performance.

然後安德魯將回顧我們的部門表現。

And following that, Rich will discuss our financial results in more detail.

接下來，里奇將更詳細地討論我們的財務表現。

And then as always, we'll open up the call for your questions.

然後，像往常一樣，我們將打開電話詢問您的問題。

Olympic Steel's ability to deliver solid results at a time when the steel industry is facing significant pricing pressure is a true testament to the success of our diversification strategy.

在鋼鐵業面臨巨大定價壓力的情況下，奧林匹克鋼鐵能夠取得紮實的業績，這真正證明了我們多元化策略的成功。

For perspective, the hot-rolled index pricing fell 22% during the second quarter alone and 39% since the beginning of the year.

從長遠來看，熱軋指數定價僅第二季就下跌了 22%，自年初以來下跌了 39%。

Despite this challenging pricing environment, we increased our shipping volume and reported sales of $526 million with net income of $15 million and $22 million of EBITDA.

儘管定價環境充滿挑戰，我們仍增加了出貨量，銷售額達 5.26 億美元，淨利潤達 1,500 萬美元，稅息折舊及攤銷前利潤 (EBITDA) 達 2,200 萬美元。

Our teams continue to drive profitability across all three of our business segments.

我們的團隊繼續推動我們所有三個業務部門的獲利能力。

Our efforts to grow and expand in manufactured products, higher-margin flat-rolled products, including coated carbon and additional fabrication capabilities have strengthened our business and make us more resilient to market downturns and pricing pressures.

我們努力發展和擴大製成品、更高利潤的平板軋製產品（包括塗層碳）和額外的製造能力，增強了我們的業務，使我們能夠更好地應對市場低迷和定價壓力。

We continue to proactively identify and evaluate additional opportunities for growth, especially in higher return product lines that further our diversification strategy.

我們繼續主動識別和評估額外的成長機會，特別是在更高回報的產品線中，以進一步推進我們的多元化策略。

We're in an excellent financial position to make these investments with more than $340 million in borrowing availability under our existing credit facility.

我們的財務狀況非常好，可以利用現有信貸額度提供超過 3.4 億美元的借款來進行這些投資。

Later in the call, Rich will highlight how we're investing in new equipment and CapEx.

在稍後的電話會議中，里奇將重點介紹我們如何投資新設備和資本支出。

Additionally, our team has an impressive track record of acquiring well-run businesses that are the right fit for Olympic Steel as well as successfully integrating these companies post acquisition.

此外，我們的團隊在收購適合奧林匹克鋼鐵的營運良好的企業以及收購後成功整合這些公司方面擁有令人印象深刻的記錄。

We hope to continue to build on this success as we've seen M&A opportunities increasing as the year progresses.

我們希望繼續在這項成功的基礎上再接再厲，因為我們看到併購機會隨著時間的推移而不斷增加。

Looking ahead to the second half of 2024, we remain focused on profitability and delivering on our disciplines around working capital and operating efficiencies.

展望 2024 年下半年，我們仍然專注於獲利能力，並履行我們圍繞營運資本和營運效率的紀律。

While we expect market conditions to remain challenging in the near term, we are optimistic about the future of the domestic metals industry and remain confident that Olympic Steel is positioned to navigate short-term pressures to deliver consistent results for our shareholders.

雖然我們預期短期內市場狀況仍將充滿挑戰，但我們對國內金屬產業的未來持樂觀態度，並對奧林匹克鋼鐵公司有能力應對短期壓力，為股東提供一致的業績充滿信心。

Before I turn the call over to Andrew, I'd like to mention that we published our latest corporate responsibility report in June, and that can be found on our website.

在我把電話轉給安德魯之前，我想提一下，我們在六月發布了最新的企業責任報告，可以在我們的網站上找到該報告。

We are indeed proud of our progress and commitments in areas such as safety, team and culture and environmental responsibility.

我們確實為我們在安全、團隊和文化以及環境責任等領域的進步和承諾感到自豪。

I also want to take a moment to celebrate our incredible team and another milestone. 2024 marks the 70th anniversary of Olympic Steel's Formation in Cleveland, Ohio.

我還想花點時間慶祝我們令人難以置信的團隊和另一個里程碑。 2024 年是奧林匹克鋼鐵公司在俄亥俄州克利夫蘭成立 70 週年。

I'm so proud of the company and the culture we've built together.

我為這家公司和我們共同建立的文化感到自豪。

We're stronger than ever because our team and their dedication to our organization, to our customers and business partners and to our shareholders.

我們比以往任何時候都更強大，因為我們的團隊以及他們對我們的組織、我們的客戶、業務合作夥伴以及我們的股東的奉獻。

I'll now turn the call over to Andrew.

我現在將把電話轉給安德魯。

Thank you, Rick, and good morning, everyone.

謝謝你，瑞克，大家早安。

As Rick mentioned, we had a profitable quarter with all three segments contributing to our solid results.

正如里克所提到的，我們度過了一個盈利的季度，所有三個部門都為我們的穩健業績做出了貢獻。

We continue to see that our diversification strategy has made Olympic Steel a stronger and more resilient company.

我們繼續看到，我們的多元化策略使奧林匹克鋼鐵成為更強大、更有彈性的公司。

Our addition of value-added end product manufacturing companies provides a countercyclical benefit during falling metals pricing markets.

我們增加的增值最終產品製造公司在金屬定價市場下跌期間提供了反週期效益。

Now I'll provide some detail on each segment's results.

現在我將提供每個部分結果的一些詳細資訊。

First, in our carbon segment, we continued to face challenging market conditions in the second quarter because of the pricing pressures we have noted as well as softer-than-anticipated demand from some larger OEM customers.

首先，在我們的碳纖維領域，由於我們注意到的定價壓力以及一些較大的 OEM 客戶的需求低於預期，我們在第二季度繼續面臨充滿挑戰的市場狀況。

The good news is that the team was able to grow the business despite this pressure on pricing and demand.

好消息是，儘管定價和需求面臨壓力，團隊仍能夠發展業務。

Carbon shipping volumes improved 1.2% year-over-year and 4.3% sequentially from the first quarter of 2024.

碳運輸量年增 1.2%，較 2024 年第一季季增 4.3%。

The carbon segment also led the way in profitability, generating $9.5 million in EBITDA in the second quarter of 2024.

碳部門在獲利能力方面也處於領先地位，2024 年第二季的 EBITDA 為 950 萬美元。

Our end product manufacturing companies had a strong quarter, increasing their EBITDA margins as their cost of goods sold fell as metal pricing declined, again, highlighting the countercyclical benefit to profitability of our end product manufacturing capabilities.

我們的最終產品製造公司季度表現強勁，隨著金屬價格下跌，銷售成本下降，其 EBITDA 利潤率有所提高，再次凸顯了我們最終產品製造能力盈利能力的反週期效益。

Also critical to our success is the continued expansion of our coated business, which has a higher gross margin profile than base hot-rolled carbon steel.

對我們的成功也至關重要的是我們塗層業務的持續擴張，該業務的毛利率高於基礎熱軋碳鋼。

In the first half of 2024, our coated shipments increased 32% versus a 3% increase for the industry.

2024 年上半年，我們的塗層出貨量成長了 32%，而產業增幅為 3%。

Coated products now represents 12% of our overall product mix.

塗層產品目前占我們整體產品組合的 12%。

We are continuing to win new fabrication business, led by Max Fitzgerald, our new fabrication team structure and consistency of process are accelerating growth that provides margin stability during periods of falling metals pricing.

在馬克斯·菲茨杰拉德 (Max Fitzgerald) 的領導下，我們將繼續贏得新的製造業務，我們新的製造團隊結構和流程的一致性正在加速增長，從而在金屬價格下跌期間提供利潤穩定。

Our expanded fabrication capabilities also add market growth potential and the outsourcing of labor and supply chain dynamics in this post-COVID economy.

我們擴大的製造能力也增加了後疫情經濟中的市場成長潛力以及勞動力外包和供應鏈動態。

The pipe and tube segment posted solid results in the second quarter of 2024 with adjusted EBITDA of $7.7 million, including an 8.5% increase in shipping volume year-over-year.

管道部門在 2024 年第二季度取得了穩健的業績，調整後 EBITDA 為 770 萬美元，其中運輸量同比增長 8.5%。

Our strategy to expand our value-added services has increased our margins and allowed us to maintain profitability in declining hot-rolled steel markets.

我們擴大加值服務的策略提高了我們的利潤率，並使我們能夠在不斷下滑的熱軋鋼材市場中保持獲利能力。

The integration of Central Tube & Bar continues to go well, and that business will continue to help drive our pipe and tube margins going forward.

Central Tube & Bar 的整合繼續順利進行，該業務將繼續幫助推動我們的管道和管材利潤率向前發展。

Our legacy pipe and tube business and the central tube and bar facility continued to enhance their production capabilities, which services the value-added portion of our business.

我們的傳統管材業務以及中央管材和棒材工廠繼續增強其生產能力，為我們業務的增值部分提供服務。

During the first half of 2024, our CTI operation in Romeoville, Illinois added a new six-axis tube laser and CTB is slated to add a new tube laser in the third quarter of 2024.

2024 年上半年，我們位於伊利諾州羅密歐維爾的 CTI 工廠增加了一台新的六軸管雷射器，CTB 預計在 2024 年第三季增加一台新的管雷射。

Our ability to provide quick turnaround of quality fabricated parts has enabled us to win more of this business, furthering our growth and higher return strategy.

我們提供快速週轉的優質製造零件的能力使我們能夠贏得更多的業務，進一步推動我們的成長和更高回報的策略。

The specialty metals segment experienced its best quarter for both volume and profitability since the first quarter of 2023.

特種金屬領域經歷了自 2023 年第一季以來銷量和盈利能力最好的季度。

Shipping volumes during the second quarter of 2024 increased 10.4% year-over-year and 6% sequentially from the first quarter of 2024.

2024 年第二季的航運量年增 10.4%，較 2024 年第一季季增 6%。

The segment contributed $8.8 million of EBITDA during the quarter.

該部門在本季度貢獻了 880 萬美元的 EBITDA。

Overall, we are pleased with the team's ability to win new business and deliver profitable results in a challenging environment.

總體而言，我們對團隊在充滿挑戰的環境中贏得新業務並實現盈利結果的能力感到滿意。

As we navigate an uncertain market in the second half of 2024, we will continue to focus on the things we can control.

當我們在 2024 年下半年應對不確定的市場時，我們將繼續關注我們可以控制的事情。

Operating expense and inventory discipline, along with superior customer service will remain at the forefront.

營運費用和庫存紀律以及卓越的客戶服務將繼續處於領先地位。

Now I'll turn the call over to Rich.

現在我將把電話轉給 Rich。

Thank you, Andrew.

謝謝你，安德魯。

As you heard from Rick and Andrew, all three segments contributed to our profitability despite the challenging market conditions.

正如您從里克和安德魯那裡聽到的那樣，儘管市場條件充滿挑戰，但這三個部門都為我們的盈利能力做出了貢獻。

Our second quarter results reflect the impact of our diversification strategy and our team's continued execution of our operating disciplines.

我們第二季的業績反映了我們多元化策略的影響以及我們團隊持續執行營運紀律的影響。

Before I discuss the results in more detail, I want to remind everyone that year-over-year comparisons are impacted by the October 2023 acquisition of Central Tube & Bar, whose results are included in our pipe and tube segment.

在更詳細地討論結果之前，我想提醒大家，同比比較受到 2023 年 10 月收購 Central Tube & Bar 的影響，該公司的結果包含在我們的管道和管材部門中。

For the second quarter, net income totaled $7.7 million compared with $15 million in the second quarter of 2023.

第二季淨利總計 770 萬美元，而 2023 年第二季淨利為 1,500 萬美元。

EBITDA in the quarter was $22.3 million [$21.3 million] compared with $32.2 million [$31.2 million] in the prior year period.

本季 EBITDA 為 2,230 萬美元 [2,130 萬美元]，而去年同期為 3,220 萬美元 [3,120 萬美元]。

Both the second quarter of 2024 and 2023 include $1 million of LIFO pretax income.

2024 年和 2023 年第二季均包含 100 萬美元的 LIFO 稅前收入。

Consolidated operating expenses for the second quarter totaled $104.6 million compared with $101.6 million in the second quarter of 2023.

第二季的綜合營運支出總計 1.046 億美元，而 2023 年第二季的綜合營運支出為 1.016 億美元。

Our second quarter operating expenses reflect the addition of Central Tube & Bar, which does not report tons sold.

我們第二季的營運支出反映了 Central Tube & Bar 的增加，該公司沒有報告銷售量。

Therefore, operating expenses per ton at the consolidated level and for the pipe and tube segment will appear higher year-over-year.

因此，綜合層面以及管材業務的每噸營運費用將較去年同期上升。

As a reminder, we do not report tons sold for McCullough Industries, EZ-Dumper, EZ-Dumper, Shaw Stainless or the entire pipe and tube segment.

提醒一下，我們沒有報告 McCullough Industries、EZ-Dumper、EZ-Dumper、Shaw 不銹鋼或整個管道和管材部門的銷售噸數。

Consolidated operating expenses for the second quarter included $4 million of CTB operating expenses and $1.8 million of lower incentive expenses when compared with the second quarter of 2023.

與 2023 年第二季相比，第二季的合併營運費用包括 400 萬美元的 CTB 營運費用和 180 萬美元的激勵費用。

Our effective borrowing rate in the second quarter of 2024 is also higher due to the expiration of our interest rate hedge.

由於我們的利率對沖到期，我們 2024 年第二季的有效借款利率也較高。

We ended the quarter with total debt of $209 million, an increase from $190 million at year-end.

本季結束時，我們的債務總額為 2.09 億美元，比年底的 1.9 億美元有所增加。

This increase was driven by our need to fund higher levels of working capital during the first half of 2024.

這一增長是由於我們需要在 2024 年上半年為更高水準的營運資金提供資金。

We continue to have access to more than $340 million in additional borrowing availability to support investments in higher return opportunities.

我們繼續獲得超過 3.4 億美元的額外借款，以支持對更高回報機會的投資。

Our capital expenditures for the first half of 2024 totaled $13.2 million compared with depreciation of $11.8 million.

2024 年上半年，我們的資本支出總計 1,320 萬美元，而折舊額為 1,180 萬美元。

Equipment lead times remain long and we've estimated that 2024 capital expenditures will be approximately $30 million as we continue to make investments in automation, fabrication and equipment that results in higher gross margin opportunities and more consistent results.

設備交付週期仍然很長，我們預計 2024 年的資本支出將約為 3000 萬美元，因為我們將繼續在自動化、製造和設備方面進行投資，從而帶來更高的毛利率機會和更一致的結果。

As noted in our earnings release last night, we recently ordered two new cut-to-length lines in one high-speed splitter to further expand our efforts in our coded and specialty metals product lines.

正如我們昨晚發布的財報中所指出的，我們最近在一台高速分切機中訂購了兩條新的定長切割生產線，以進一步擴大我們在編碼和特種金屬產品線方面的努力。

The majority of the cash flow associated with those expenditures will occur in 2025 and early 2026.

與這些支出相關的大部分現金流將發生在 2025 年和 2026 年初。

During the first half of 2024, we added additional leased flat-rolled laser capacity in our Cleveland operation and leased to laser capacity in our Romeoville location.

2024 年上半年，我們在克利夫蘭工廠增加了額外的租賃平軋雷射產能，並在羅密歐維爾工廠租賃了雷射產能。

We will add additional leased tube laser capacity at CTB during the third quarter of 2024.

我們將在 2024 年第三季增加 CTB 的額外租賃管雷射產能。

The leasing of these value-added laser lines is not reflected in our CapEx numbers, but are included in our operating expenses.

這些增值雷射線的租賃並未反映在我們的資本支出數字中，但包含在我們的營運費用中。

Our second quarter 2024 effective income tax rate was 28.4% compared to 30.3% in the same period last year.

我們 2024 年第二季的有效所得稅率為 28.4%，去年同期為 30.3%。

We expect our 2024 tax rate to approximate 28% to 29%.

我們預計 2024 年的稅率約為 28% 至 29%。

In addition, we paid a quarterly dividend of $0.15 per share in the second quarter.

此外，我們在第二季度支付了每股 0.15 美元的季度股息。

Our Board of Directors approved our next regular quarterly cash dividend of $0.15 per share, which is payable on September 16, 2024, to shareholders on record as of September 2, 2024.

我們的董事會批准了下一次定期季度現金股利每股 0.15 美元，將於 2024 年 9 月 16 日支付給截至 2024 年 9 月 2 日登記在冊的股東。

The company has now paid regular quarterly dividends dating back to 2006, increasing the dividend in each of the last three years.

該公司自 2006 年起就定期支付季度股息，並在過去三年中每年增加股息。

As we look ahead, we continue to be optimistic about our ability to deliver consistent profitable results at the segment and enterprise levels.

展望未來，我們繼續對我們在細分市場和企業層面提供持續獲利結果的能力持樂觀態度。

We have expanded into higher margin, higher value-added opportunities.

我們已經擴展到更高利潤、更高附加價值的機會。

And as a result, we've been able to grow the business with existing customers and win new customers.

因此，我們能夠與現有客戶一起發展業務並贏得新客戶。

We also remain in a strong operational and financial position to continue to invest in our future.

我們也保持強勁的營運和財務狀況，繼續投資於我們的未來。

We are proud of our team that is focused on controlling what we can control and delivering value for our customers and our shareholders.

我們為我們的團隊感到自豪，他們專注於控制我們可以控制的事情並為我們的客戶和股東創造價值。

Operator, we are now ready for questions.

接線員，我們現在準備好提問了。

(Operator Instructions) Samuel McKinney, KeyBanc.

（操作員說明）Samuel McKinney，KeyBanc。

Starting in pipe and tube great gross margins this quarter around 34%, despite the lower sales.

儘管銷售額較低，但本季管材和管材的毛利率仍高達 34% 左右。

They've now been above 30% for six quarters in a row.

目前，他們已經連續六個季度保持在 30% 以上。

What drove the uptick in second quarter gross margins despite those lower sales?

儘管銷售額較低，但什麼推動了第二季毛利率的上升？

And do you think margins can hang in that 33%, 34% range as you continue to glean more benefits from fabrication, automation and customer outsourcing?

隨著您繼續從製造、自動化和客戶外包中獲得更多收益，您認為利潤率還能保持在 33% 到 34% 的範圍內嗎？

Sam, this is Andrew.

山姆，這是安德魯。

So the answer is yes.

所以答案是肯定的。

It's been a strategy for our CTI Group to continue to grow in the fabrication part of the business.

繼續發展製造業務一直是我們 CTI 集團的策略。

We are investing in more fabrication equipment.

我們正在投資更多的製造設備。

We do expect that those margins will be there and probably grow and it's really part of our downstream strategy to do more value added.

我們確實預計這些利潤將會存在並且可能會成長，這確實是我們下游策略的一部分，以實現更多附加價值。

We are still very interested in the distribution of the pipe and tube, but certainly, the growth part of it is coming on the fabrication side.

我們仍然對管道和管材的分銷非常感興趣，但可以肯定的是，它的成長部分來自製造方面。

Yes.

是的。

And I think the other piece is the acquisition of CTB last year.

我認為另一件事是去年對 CTB 的收購。

They've certainly got a strong margin profile.

他們的利潤率確實很高。

So that would be the other piece of it, right?

那麼這將是它的另一部分，對吧？

Okay.

好的。

And then moving to the balance sheet, inventory value on the balance sheet stayed pretty similar despite the steep pricing declines during the second quarter that you called out in the release.

然後轉向資產負債表，儘管您在新聞稿中指出第二季度價格急劇下降，但資產負債表上的庫存價值仍然非常相似。

Assuming that, that sequential steadiness is more of a function of volume, how do you view your current inventory levels against lead times headed into the back half of the year?

假設連續穩定性更取決於數量，那麼您如何看待當前的庫存水準與今年下半年的交貨時間？

Sam, it's Rich.

山姆，我是里奇。

I'll take the value first.

我先取值。

And so I think what you saw in the second quarter, really, it's not an increase in quantity.

所以我認為你在第二季度看到的實際上並不是數量的增加。

What it was, was a flip really between stainless surcharges on up 15% during the quarter.

事實上，本季不銹鋼附加費上漲了 15%。

So you saw a higher value of stainless inventory while carbon inventory values went down.

因此，您會看到不銹鋼庫存價值更高，而碳庫存價值下降。

I'll turn it over to Andrew for the other part of the question.

我將把問題的另一部分轉交給安德魯。

Yes, Sam.

是的，山姆。

So I think the inventory level is at an appropriate level.

所以我認為庫存水準處於適當水準。

I think that there's a little bit more work that we certainly can do as we get through the third quarter into the fourth quarter, but I think the inventory level is appropriate.

我認為，從第三季度到第四季度，我們當然可以做更多的工作，但我認為庫存水準是合適的。

Dave Storms, Stonegate.

戴夫·斯托姆斯，石門。

Just volumes are up real nicely, it looks like.

看起來銷量確實成長得很好。

Just hoping -- I wonder if you have any thoughts around any pricing outlook.

只是希望——我想知道您對定價前景是否有任何想法。

Is there any kind of green shoots that you're starting to see maybe inventory levels industry-wide change in bid in environment, any momentum in the stock spot market, anything like that.

您是否開始看到任何類型的萌芽，也許是庫存水平全行業的環境投標變化，股票現貨市場的任何動力，諸如此類的事情。

Dave, it's Rich.

戴夫，我是里奇。

And so what we would tell you is that as we pointed out in the release in our comments, that second quarter hot-rolled pricing declined about 20%.

因此，我們要告訴您的是，正如我們在評論中指出的那樣，第二季熱軋價格下降了約 20%。

We've seen that decline a little further here into July.

進入 7 月份，我們看到這一數字進一步下降。

That's really on the pricing side.

這確實是在定價方面。

But what we've continued to see from a demand side is that we're performing better year-over-year.

但從需求方面我們繼續看到的是，我們的表現逐年更好。

I think what you saw in the second quarter as well as the first half is that we were up about 2% year-over-year.

我認為你在第二季度和上半年看到的是我們同比增長了約 2%。

We expect that to continue -- that trend to continue into the third quarter.

我們預計這種趨勢將持續到第三季。

But that's what we're seeing on the volume, and we saw a nice jump up Q2 versus Q1 sequentially.

但這就是我們在銷量上看到的情況，我們看到第二季度與第一季相比出現了很好的跳躍。

Understood.

明白了。

And then just on coded for Carbon.

然後就為 Carbon 編碼。

What's the outlook for this going forward through the back half of 2024.

2024 年下半年的前景如何？

Is there an optimal call percent of carbon that you would like this to take up by the end of 2024.

您希望在 2024 年底前達到最佳的碳排放百分比嗎？

Just any outlook you have there would be helpful.

您在那裡擁有的任何觀點都會有所幫助。

Yes.

是的。

So what I would say, David, is we've seen terrific growth.

所以我想說的是，大衛，我們已經看到了驚人的成長。

Mike Tookey runs our coated for Olympic, he's doing a great job.

麥克圖基 (Mike Tookey) 為我們的奧運服裝負責，他做得很好。

I would say that growth has been about 34% over last year.

我想說，比去年增長了約 34%。

We expect to continue to see that through the balance of the year and actually see that accelerate as we get into '25 as we continue to make head roads into construction in the HVAC markets.

我們預計在今年剩下的時間裡會繼續看到這種情況，隨著我們繼續在暖通空調市場的建設中取得進展，進入 25 年時實際上會看到這種情況加速。

Chris Sakai, Singular Research.

克里斯·酒井，奇異研究公司。

I wanted to talk about, I guess, the pricing is facing some headwinds, how is that affecting M&A valuations?

我想談談定價面臨一些阻力，這對併購估值有何影響？

Is it decreasing then?

那還減少嗎？

Chris, it's Rick.

克里斯，我是瑞克。

Really good question.

真是個好問題。

I think valuations remain pretty steady in our industry.

我認為我們行業的估值仍然相當穩定。

I think the real trick to valuations is looking over a performance cycle, the ups and downs in pricing and trying to look at a company's value over that cycle.

我認為估值的真正技巧是審視業績週期、定價的起伏，並試著審視公司在這個週期內的價值。

That's how we tend to look at it.

我們傾向於這樣看待它。

So certainly, in the short term, with some pricing pressure as you've seen in the steel industry in the last couple of quarters.

因此，短期內肯定會面臨一些定價壓力，正如過去幾季鋼鐵業所看到的那樣。

The earnings have been a little bit compressed.

收益有點被壓縮了。

But what I'd tell you is at least our approach on M&A, we're looking for really good, well-run companies that are consistently profitable that have consistently high return models and looking at those companies and considering where pricing in the market is, is certainly part of the valuation, but it's really more important to look at how they perform over the cycle.

但我要告訴你的是，至少我們在併購方面的方法是，我們正在尋找真正優秀、營運良好、持續盈利、擁有持續高回報模式的公司，並關注這些公司並考慮市場定價，當然是估值的一部分，但更重要的是看看它們在整個週期中的表現如何。

So I think on M&A, we're active.

所以我認為在併購方面，我們很活躍。

You know we've been active the last five years.

你知道我們在過去五年裡一直很活躍。

We've seen the activity in the flow pick up in the second quarter and certainly continue to have that part, as we mentioned in our comments, certainly consider M&A to be part of our growth strategy.

我們已經看到第二季度流量活動有所回升，並且肯定會繼續存在，正如我們在評論中提到的那樣，當然將併購視為我們成長策略的一部分。

Okay.

好的。

And then in this type of environment, is there any specific part of the business that you're focusing on more or that's performing better than the others?

那麼在這種類型的環境中，您是否更專注於業務的任何特定部分或比其他部分錶現更好？

And what should that be and why?

那應該是什麼以及為什麼？

Well, so Chris, this is Andrew.

好吧，克里斯，這是安德魯。

What I would say is fabrication has become a big growth strategy for us.

我想說的是，製造已成為我們的重大成長策略。

We have seen post-COVID the opportunities really explode in particular, from the industrial OEMs, the opportunities to be able to supply as they are looking for a finished product that can go right into assembly.

我們已經看到新冠疫情後的機會確實激增，尤其是來自工業原始設備製造商的機會，因為他們正在尋找可以直接組裝的成品，因此能夠提供供應的機會。

And we've seen an acceleration of not only opportunities but picking up some fairly significant business.

我們不僅看到了機會的加速成長，還看到了一些相當重要的業務。

But I would also tell you that in all three of our segments, there is -- there are pockets of business that are starting to improve.

但我還要告訴你，在我們的所有三個細分市場中，都有一些業務正在開始改善。

On the specialty side, we're seeing a nice improvement in the food equipment of the truck trailer or the appliance side of the business.

在專業方面，我們看到卡車拖車的食品設備或企業的電器方面有了很大的改進。

And our pipe and tube, where we're making some nice inroads with data centers.

還有我們的管道和管道，我們正在數據中心方面取得一些不錯的進展。

And then our carbon business, again, from a fabrication perspective, that's been pretty big, and we've seen some of the other industrials coming back a little bit.

然後，我們的碳業務，再次從製造角度來看，規模相當大，我們已經看到其他一些工業有所回升。

So we're pleased for all three segments with what we're seeing.

因此，我們對所看到的所有三個部分感到滿意。

And Chris, it's Rich.

克里斯，我是里奇。

I would add that in periods of time where pricing may compress the distribution margins, you're seeing us expand the margins on our and manufactured products as their cost of goods sold come down in these periods.

我想補充一點，在定價可能會壓縮分銷利潤的時期，您會看到我們擴大了我們的產品和製造產品的利潤，因為這些時期的銷售成本下降了。

And that was a nice balance in the second quarter.

第二季這是一個很好的平衡。

Yes, exactly.

是的，完全正確。

I think, Chris, what you've seen is -- and the evidence was there, and we talked about it a little bit, really a nice balance in all three of our business segments.

我想，克里斯，你所看到的是——證據就在那裡，我們對此進行了一些討論，我們的三個業務部門確實實現了很好的平衡。

And that's really the fruition of very strategic initiatives that we've taken over the years.

這確實是我們多年來採取的策略措施的成果。

Andrew has talked about the fabrication.

安德魯談到了捏造的事。

Rich just talked about the end products and the offset and the counter cyclicality of that.

里奇剛剛談到了最終產品以及其抵消和反週期性。

Certainly, we just talked about the mix within our carbon division of moving to more of the coated products.

當然，我們剛剛談到了我們的碳部門內轉向更多塗層產品的組合。

So we talked about acquisitions like in the pipe and tube, we had a question about the margins and the CTB acquisition.

所以我們討論了管道和管材領域的收購，我們有一個關於利潤率和 CTB 收購的問題。

So that's really what we've been laser-focused on together with controlling the things we can control that we say every quarter and keeping our expenses really in line and turning our inventory.

因此，這確實是我們一直關注的重點，同時控制我們每個季度所說的可以控制的事情，並保持我們的支出真正符合要求並週轉我們的庫存。

So that's it, and that's what we're focused on, and we're going to continue to focus on that.

就是這樣，這就是我們關注的重點，我們將繼續關注這一點。

Thank you.

謝謝。

At this time, I would like to turn the floor back over to Mr. Rick Marabito for closing comments.

現在，我想把發言權交還給 Rick Marabito 先生以供結束發言。

Thank you so much, and thank you, everybody, for joining us on the call this morning.

非常感謝你們，也感謝大家今天早上加入我們的電話會議。

We appreciate your continued interest in Olympic Steel.

我們感謝您對奧林匹克鋼鐵的持續關注。

And we look forward to speaking with you again next quarter, if not sooner.

我們期待下個季度（甚至更早）再次與您交談。

Thank you.

謝謝。

Have a great day.

祝你有美好的一天。

Thank you.

謝謝。

This does conclude today's teleconference.

今天的電話會議到此結束。

You may disconnect your lines at this time.

此時您可以斷開線路。

Thank you for your participation, and have a great day.

感謝您的參與，祝您有美好的一天。