Olympic Steel Inc (ZEUS) 2024 Q3 法說會逐字稿

Good morning, and welcome to the Olympic Steel 2024 third-quarter financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded.

早安，歡迎參加奧鋼2024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。

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

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)。請繼續，先生。

Thank you, operator. Welcome to Olympic Steel's earnings call for the third quarter of 2024. 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 2024 年第三季財報電話會議。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. Some statements made on today's call will be predictive and are intended to be made as forward-looking within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and may not reflect actual results. The company does not undertake to update such statements, changes in assumptions, or changes in other factors affecting such forward-looking statements.

在我們開始之前，我有一些提醒。今天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。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. 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 Steel's 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。今天的直播將被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 2024 third-quarter results. I'll begin by summarizing our results for the third quarter, and then I'll review how our strategies for diversification and overall focus on investing in and expanding in our higher-margin opportunities are helping to drive results in difficult markets. Andrew will then review our segment performance and highlight our CapEx growth initiatives, and following that, Rich will discuss our financial results in more detail. And then as always, we will open the call up 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 2024 年第三季業績。我將首先總結我們第三季的業績，然後回顧我們的多元化策略以及對投資和擴大高利潤機會的整體關注如何幫助在困難的市場中推動業績。然後，安德魯將回顧我們的部門業績並強調我們的資本支出成長計劃，隨後，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。

Challenging macroeconomic trends during the third quarter resulted in lower overall OEM demand, particularly in the heavy equipment sector, which is a significant end market for Olympic Steel. Reduced demand resulted in carbon pricing pressures that affected both our carbon flat-rolled and pipe and tube segments. Additionally, stainless steel surcharges fell during the quarter, creating pricing pressure in our specialty metals segment.

第三季充滿挑戰的宏觀經濟趨勢導致整體原始設備製造商需求下降，特別是在重型設備領域，這是奧林匹克鋼鐵的重要終端市場。需求減少導致碳定價壓力，影響了我們的碳扁材和管材部門。此外，本季不銹鋼附加費下降，給我們的特殊金屬領域帶來了定價壓力。

Despite these market headwinds, Olympic Steel has demonstrated continued resilience, as all three segments were EBITDA positive for the third quarter of 2024, generating $15 million in EBITDA on $470 million of sales. The results reflect the success of our strategy to diversify into countercyclical steel-intensive end products and invest in higher-margin opportunities such as flat-rolled coated products and the expansion of our fabrication capabilities.

儘管存在這些市場阻力，奧林匹克鋼鐵公司仍表現出了持續的韌性，因為所有三個部門在2024 年第三季度的EBITDA 均為正數，在4.7 億美元的銷售額中產生了1500 萬美元的EBITDA 。結果反映了我們多元化發展反週期鋼鐵密集型最終產品、投資於平軋塗層產品等利潤率更高的機會以及擴大我們的製造能力的策略的成功。

Given the ongoing uncertainty in the political and macroeconomic environment, our team is working diligently to manage costs and build efficiencies into our business. This includes investing in new equipment, automation and processing capabilities that will drive safety, efficiency, productivity, and future growth. We are closely managing our operating expenses and aligning our labor costs with customer demand.

鑑於政治和宏觀經濟環境持續存在的不確定性，我們的團隊正在努力管理成本並提高業務效率。這包括投資新設備、自動化和處理能力，以推動安全、效率、生產力和未來成長。我們正在密切管理我們的營運費用，並使我們的勞動力成本與客戶需求保持一致。

We believe the success of our acquisitions and capital investments in key organic growth areas has created a stronger, more resilient Olympic Steel. We are well positioned to continue to invest in these initiatives. Andrew will review recent equipment investments in a moment, and we remain active in our pursuit of acquisitions that meet our success criteria.

我們相信，我們在關鍵有機成長領域的收購和資本投資的成功已經創造了一個更強大、更有彈性的奧林匹克鋼鐵公司。我們有能力繼續投資這些舉措。安德魯稍後將回顧最近的設備投資，我們將繼續積極尋求符合我們成功標準的收購。

During the third quarter, we reduced our debt by approximately $12 million to $197 million, and we entered the fourth quarter with approximately $304 million of credit availability to fund these growth initiatives. Looking to the fourth quarter of 2024, we expect the macroeconomic headwinds to continue while we await the outcome of the presidential election and the Fed's direction on future interest rate cuts.

第三季度，我們的債務減少了約 1,200 萬美元，達到 1.97 億美元，進入第四季度時，我們擁有約 3.04 億美元的可用信貸來為這些增長計劃提供資金。展望2024年第四季度，我們預期宏觀經濟逆風將持續，同時等待總統選舉結果和聯準會未來降息方向。

We remain optimistic for the long-term outlook for Olympic Steel and our industry. We are confident that our strategy, combined with our financial flexibility to continue investing in organic and acquisitive growth opportunities, will make us even more resilient and create additional value for our shareholders.

我們對奧林匹克鋼鐵和我們行業的長期前景保持樂觀。我們相信，我們的策略，加上我們繼續投資有機和收購性成長機會的財務靈活性，將使我們更具彈性，並為股東創造額外價值。

Now I'll turn the call over to Andrew for his comments on our segment performance.

現在我將把電話轉給安德魯，請他對我們的部門表現發表評論。

Thank you, Rick. And good morning, everyone. As Rick discussed, all three business segments were EBITDA positive during the third quarter, even as we continue to experience the significant industry-wide headwinds. Our sustained profitability is a testament to the strategies we have in place, the diversification, operational efficiency, enriched product mix, and expansion of our fabrication capacity and capabilities. Now I'll provide some detail on each segment's results.

謝謝你，瑞克。大家早安。正如里克所討論的，儘管我們繼續面臨全行業的重大阻力，但第三季所有三個業務部門的 EBITDA 均為正值。我們的持續獲利能力證明了我們所採取的策略、多元化、營運效率、豐富的產品組合以及製造能力和能力的擴展。現在我將提供每個部分結果的一些詳細資訊。

In our carbon segment, volumes fell more than the normal seasonal decline for third-quarter sales due to lower demand from our contractual OEM customers, especially in the heavy equipment sector. Even with this decline, the carbon segment generated $4.5 million in EBITDA in the third quarter. We saw strength in our countercyclical end products companies with strong quarters for Metal-Fab, our manufacturer of HVAC inventing products; and McCullough Industries, our manufacturer of industrial hoppers.

在我們的碳纖維領域，由於我們的合約 OEM 客戶（尤其是重型設備領域）的需求下降，銷量下降幅度超過了第三季銷售的正常季節性下降。即使出現這種下降，碳部門第三季的 EBITDA 仍達到 450 萬美元。我們看到了反週期最終產品公司的實力，其中我們的 HVAC 發明產品製造商 Metal-Fab 的季度表現強勁；以及我們的工業料斗製造商 McCullough Industries。

We continue to see gains for our fabrication business as OEMs continue to outsource more of their first stages of manufacturing. To serve this growing demand and improve the efficiency of our operations, we continue to invest in expanding our fabrication and processing capacity and capabilities. We have also aligned our fabrication-intensive facilities in Chambersburg, Pennsylvania; Mount Sterling, Kentucky; and Buford, Georgia under the leadership of Max Fitzgerald, who has a strong growth-oriented background in metal fabrication.

隨著原始設備製造商繼續外包更多的第一階段製造，我們的製造業務繼續成長。為了滿足這一不斷增長的需求並提高我們的營運效率，我們繼續投資擴大我們的製造和加工能力。我們也調整了賓州錢伯斯堡的製造密集工廠；肯塔基州斯特林山；喬治亞州佈福德由馬克斯·菲茨杰拉德 (Max Fitzgerald) 領導，他在金屬製造領域擁有強大的成長導向背景。

Our carbon segment continues to invest in automation, installing new stacking and material handling equipment on our Cleveland, Ohio temper mill, which is expected to improve throughput by up to 30%. Our pipe and tube segment posted adjusted EBITDA of $6.7 million in the third quarter of 2024. Gross margins remained stronger and higher than previous years due to our value-added processing, which has been augmented by last year's acquisition of Central Tube and Bar.

我們的碳纖維部門繼續投資自動化，在俄亥俄州克利夫蘭平整機上安裝新的堆疊和材料處理設備，預計產量將提高 30%。我們的管道部門在 2024 年第三季的調整後 EBITDA 為 670 萬美元。由於去年收購了 Central Tube and Bar，我們的加值加工業務得到了增強，毛利率仍然比往年更高。

For our specialty metals segment, stainless surcharges fell to a 3.5 year low in September. Nonetheless, the segment had a solid third quarter, contributing $5.9 million of EBITDA. We accomplished this by gaining market share in stainless and aluminum. We also installed a new automated packaging line in our Streetsboro, Ohio facility to improve throughput and efficiency. We remain committed to growing organically by investing in higher-margin opportunities.

對於我們的特殊金屬部門，9 月不銹鋼附加費跌至 3.5 年來的最低點。儘管如此，該部門第三季的表現依然強勁，貢獻了 590 萬美元的 EBITDA。我們透過獲得不銹鋼和鋁的市場份額來實現這一目標。我們還在俄亥俄州 Streetsboro 工廠安裝了一條新的自動化包裝線，以提高吞吐量和效率。我們仍然致力於透過投資更高利潤的機會來實現有機成長。

During 2024, we have ordered significant new pieces of equipment that will be delivered in 2025 and 2026 to further enhance our growth strategies. In the carbon segment, we ordered a new cut-to-length line for our Minneapolis coil facility, which will support our continued growth in cold-rolled and coated products. We have ordered two new lasers and two new plasma-cutting machines along with an automated material handling system to expand our fabrication capabilities in Chambersburg, Pennsylvania.

2024 年，我們訂購了重要的新設備，這些設備將於 2025 年和 2026 年交付，以進一步加強我們的成長策略。在碳纖維領域，我們為明尼阿波利斯卷材工廠訂購了一條新的定尺切割生產線，這將支持我們在冷軋和塗層產品方面的持續成長。我們訂購了兩台新雷射和兩台新等離子切割機以及自動化材料處理系統，以擴大我們在賓州錢伯斯堡的製造能力。

In the specialty metals segment, we have ordered a new cut-to-length line for our Schaumburg, Illinois facility to support our growing white metals distribution business, and we also ordered a new high-speed specialty slitter for our Berlin Metals operation outside of Gary, Indiana.

在特殊金屬領域，我們為伊利諾伊州紹姆堡工廠訂購了一條新的定尺切割生產線，以支持我們不斷增長的白色金屬分銷業務，我們還為我們在柏林以外的柏林金屬業務訂購了一條新的高速特種分切機。

As I reflect on the third quarter and look at the fourth quarter, we think that macroeconomic headwinds are likely to continue. At the same time, we are benefiting from our strategy to expand into steel-intensive end products that are countercyclical to metals pricing and invest in equipment that makes us safer, more efficient, and helps us grow our higher-margin fabrication and processing capabilities. We will continue to focus on what we can control and be mindful of and responsive to the things that we cannot control.

當我回顧第三季和第四季時，我們認為宏觀經濟逆風可能會持續下去。同時，我們正受益於我們的策略，即擴展到與金屬價格反週期的鋼鐵密集型最終產品，並投資於使我們更安全、更有效率的設備，並幫助我們提高更高利潤的製造和加工能力。我們將繼續關注我們可以控制的事情，並關注和應對我們無法控制的事情。

That concludes my comments, and I will turn the call over to Rich to go through the financials.

我的評論到此結束，我將把電話轉給里奇，讓他查看財務狀況。

Thank you, Andrew. As you heard from both Rick and Andrew, all three segments contributed to our profitability during the quarter. Our third-quarter results reflect the impact of our diversification strategy and our team's continued execution of our operating disciplines. 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 and Bar, whose results are included in our pipe and tube segment.

謝謝你，安德魯。正如您從里克和安德魯那裡聽到的那樣，所有三個部門都為我們本季度的盈利能力做出了貢獻。我們的第三季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。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 and Bar 的影響，該公司的業績包含在我們的管道和管材部門中。

For the third quarter, net income totaled $2.7 million compared with $12.2 million in the third quarter of 2023. EBITDA for the third quarter was $15 million compared with $27.1 million in the prior-year period. Both the third quarter of 2024 and 2023 results include $2 million of LIFO pretax income. Consolidated operating expenses for the third quarter totaled $99 million compared with $91 million in the third quarter of 2023.

第三季淨利總計 270 萬美元，而 2023 年第三季淨利為 1,220 萬美元。第三季 EBITDA 為 1,500 萬美元，去年同期為 2,710 萬美元。2024 年和 2023 年第三季的業績均包括 200 萬美元的 LIFO 稅前收入。第三季的綜合營運費用總計 9,900 萬美元，而 2023 年第三季的綜合營運費用為 9,100 萬美元。

Our third-quarter operating expenses reflect the addition of Central Tube and Bar, which does not report tonnes sold. Therefore, operating expenses per tonne at the consolidated level and for the pipe and tube segment will appear higher year over year. As a reminder, we do not report tonnes sold for McCullough Industries, EZ-Dumper, Metal-Fab, Shaw Stainless, or the entire pipe and tube segment.

我們第三季的營運支出反映了中央管和棒材的增加，該公司沒有報告銷售噸數。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。提醒一下，我們沒有報告 McCullough Industries、EZ-Dumper、Metal-Fab、Shaw 不銹鋼或整個管道和管材部門的銷售噸數。

Consolidated operating expenses for the third quarter included $3.3 million of CTB operating expenses and $1.2 million of lower incentive expenses when compared with the third quarter of 2023. Operating expenses for the third quarter of 2023 also reflect a $4 million cost benefit due to the employee retention credit that did not recur in the third quarter of 2024.

與 2023 年第三季相比，第三季的合併營運費用包括 330 萬美元的 CTB 營運費用和 120 萬美元的激勵費用。2023 年第三季的營運費用也反映了 400 萬美元的成本效益，這是由於 2024 年第三季沒有重複實施員工保留信貸所致。

We ended the quarter with total debt of $197 million, a $12 million decrease from the second quarter of 2024. We anticipate increased cash flow in the fourth quarter of 2024 due to lower working capital requirements. We continue to have access to more than $300 million of additional borrowing availability to support our investments in higher-return opportunities.

截至本季末，我們的債務總額為 1.97 億美元，比 2024 年第二季減少 1,200 萬美元。由於營運資金需求降低，我們預計 2024 年第四季現金流將增加。我們繼續獲得超過 3 億美元的額外借款，以支持我們對高回報機會的投資。

Our capital expenditures for the first three quarters of 2024 totaled $22.3 million compared with depreciation of $17.6 million. We estimate that 2024 capital expenditures will be approximately $30 million as we continue to invest in automation, our fabrication and processing capabilities, and other higher-return parts of our business. Our third quarter 2024 effective income tax rate was 30% compared with 27.7% in the same period last year. We expect our 2024 tax rate to approximate 28% to 29%.

2024 年前三季我們的資本支出總計 2,230 萬美元，而折舊額為 1,760 萬美元。我們預計 2024 年的資本支出將約為 3000 萬美元，因為我們將繼續投資於自動化、製造和加工能力以及業務的其他高回報部分。我們2024年第三季的有效所得稅率為30%，而去年同期為27.7%。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 third quarter, and our Board of Directors has approved our next regular quarterly cash dividend of $0.15 per share, which is payable on December 16, 2024, to shareholders of record on December 2, 2024. The company has now paid regular quarterly dividends dating back to 2006, increasing the dividend in each of the last three years.

此外，我們在第三季度支付了每股 0.15 美元的季度股息，我們的董事會已批准我們下一次定期季度現金股息每股 0.15 美元，將於 2024 年 12 月 16 日支付給 12 月登記在冊的股東2, 2024 年。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。

Our ability to remain resilient and profitable in difficult markets is a testament to the success of our strategic investments. We will continue to execute our diversification strategy for the long term while continuing our near-term focus on expense control and working capital management. We are well positioned to weather market challenges and deliver sustained results for our shareholders.

我們在困難的市場中保持彈性和盈利的能力證明了我們戰略投資的成功。我們將繼續執行長期多元化策略，同時繼續將近期重點放在費用控制和營運資本管理。我們有能力應對市場挑戰並為股東帶來持續的成果。

Operator, we are now ready for questions.

接線員，我們現在準備好提問了。

(Operator Instructions) Dave Storms, Stonegate.

（操作員指示）Dave Storms，Stonegate。

Good morning. So you mentioned in the prepared remarks that you're obviously doing a lot to bring new machinery into your operations. Just trying to get a sense of -- and I appreciate you laying out kind of the lead times for getting them in those machines in-house. Just trying to get a sense of maybe what step two would be there between implementing those machines, getting employees trained up on them. How should we be thinking about what it will take to get those machines up and running once they're in-house?

早安.因此，您在準備好的演講中提到，您顯然正在做很多事情來將新機器引入您的營運中。只是想了解一下——我很感謝您安排了將它們放入內部機器的交貨時間。只是想了解實施這些機器和對員工進行培訓之間的第二步可能是什麼。我們應該如何考慮如何讓這些機器在內部運作後啟動並運作？

Dave, this is Andrew. I'll answer that. I would tell you that from the equipment manufacturers, the training will take place in some cases prior to the equipment coming in. They have some facilities that we can send our people to that have the equipment available that they could do some training.

戴夫，這是安德魯。我會回答這個問題。我想告訴你，設備製造商在某些情況下會在設備進來之前進行培訓。他們有一些設施，我們可以派我們的人員去那裡，那裡有可用的設備，可以進行一些培訓。

But almost immediately, as the new equipment and the new automation comes in, we'll have people that will be ready almost immediately. So once the equipment is in and ready to get going, we would expect that in a very short time period, it will be up and operational. And assuming the equipment performs the way we expected to, we'll get it right into place.

但幾乎​​立刻，隨著新設備和新自動化的到來，我們的人員幾乎會立即做好準備。因此，一旦設備安裝完成並準備好運行，我們預計將在很短的時間內啟動並運行。假設設備按照我們預期的方式運行，我們就會將其安裝到位。

Understood. That's very helpful. So we could hopefully start seeing some of that in 2025. Okay, perfect. And then just one more for me. Great to see that you paid down some debt. I know you've obviously been acquisitive in the past. Are there any M&A targets that you're kind of keeping your eye on? Maybe give a sense of what the market looks like? And maybe as you're thinking about M&A targets, are you targeting -- would you be targeting more countercyclical-type companies that have been so beneficial for you recently?

明白了。這非常有幫助。因此，我們預計在 2025 年開始看到其中的一些變化。好的，完美。然後再給我一個。很高興看到你還清了一些債務。我知道你過去顯然很貪婪。您是否正在關注任何併購目標？或許可以了解市場是什麼樣子？也許當你在考慮併購目標時，你的目標是——你會瞄準更多最近對你如此有利的反週期型公司嗎？

Yes. Thanks for the question, Dave. It's Rick. Absolutely. We're very active, continuing to look at acquisitions. You know that it's part of our strategic growth is to actually do both. So Andrew outlined a lot of the internal growth through new equipment. But don't fall us short, we're actively pursuing acquisitions. So if you look at our history over the last five years, we've made six acquisitions. So we're averaging around one to a little more than a year.

是的。謝謝你的提問，戴夫。是瑞克。絕對地。我們非常積極，繼續考慮收購。您知道，我們策略成長的一部分就是實際上做到這兩點。因此安德魯概述了透過新設備實現的許多內部成長。但不要讓我們失望，我們正在積極尋求收購。因此，如果你看看我們過去五年的歷史，我們已經進行了六次收購。所以我們平均大約一年到一年多一點。

It's been about a year. And so my line internally always is, is if we don't find an acquisition in our strike zone each year, I'd be disappointed, and I share that with you. So yes, very active. We've seen really good flow in terms of companies that would fit our strike zone. You are exactly right in terms of the strike zone. It's aside from being well-run companies where we believe we can add synergy together with a management team that's strong and continues.

已經過去一年左右了。所以我內部的立場始終是，如果我們每年都沒有在我們的罷工區找到收購，我會感到失望，我與你們分享這一點。所以是的，非常活躍。我們已經看到適合我們攻擊區的公司的流動性非常好。就擊球區而言，你是完全正確的。除了成為經營良好的公司之外，我們相信我們可以與強大且持續的管理團隊一起增加協同效應。

You know that we're -- we've shown and will continue to seek out companies that are, a, in the end market, countercyclical category and industry. So that's very much at the top of the list. B, those that do higher margin, higher return fabrication, that's very high on the list. And service centers, right? We've -- you saw the last acquisition we did was CTB in the pipe and tube sector of the service center group. So we're looking at all three of those areas. And really, the keys are finding well-run, high-return, accretive, good companies. And so stay tuned, more to come. We're actively participating in that space.

你知道，我們已經展示並將繼續尋找終端市場、反週期類別和行業的公司。所以這是最重要的。B，那些利潤率更高、回報率更高的製造商，這在名單上非常靠前。還有服務中心，對嗎？我們最近一次收購的是服務中心集團管線部門的 CTB。所以我們正在研究所有這三個領域。事實上，關鍵在於找到經營良好、高回報、增值的好公司。請繼續關注，更多內容即將推出。我們正在積極參與該領域。

Thanks for taking my questions, and good luck on the fourth quarter.

感謝您回答我的問題，祝第四季好運。

Thanks, Dave.

謝謝，戴夫。

Thank you.

謝謝。

Samuel McKinney, KeyBanc Capital Markets.

塞繆爾·麥金尼，KeyBanc 資本市場。

Hi. Good morning, guys. The continued demand weakness from industrial machinery and equipment OEMs, some of your peers have already spoken to it, and you talked about it to seasonally soft third quarter volumes. Any thoughts regarding the potential for a release of pent-up demand after we hopefully get past the election next week and gain some clarity on the next four years?

你好。早安，夥計們。工業機械和設備原始設備製造商的需求持續疲軟，您的一些同行已經談到了這一點，您也談到了第三季銷售季節性疲軟。在我們希望通過下週的選舉並對未來四年有一些了解之後，對於釋放被壓抑的需求的可能性有什麼想法嗎？

Yes, Sam, that's a great question. We do. We do think that there is some pent-up demand certainly on the spot side of the business. With the industrial OEMs, I'm not sure that we're going to see any big releases in the fourth quarter. I don't think we're going to see much of a trail off like we did in the third quarter versus the second quarter.

是的，薩姆，這是一個很好的問題。我們做到了。我們確實認為現貨業務確實存在一些被壓抑的需求。對於工業原始設備製造商來說，我不確定我們是否會在第四季度看到任何重大發布。我認為我們不會像第三季與第二季度那樣出現太大的下滑。

But I do think that there's opportunity certainly in the fourth quarter for a number of the spot players and those non-contractual customers to be more active than certainly than they had been. And I think going into next year, while they're still in their forecasting phase, I don't anticipate that we're going to see greater reductions from the heavy-duty equipment sector versus what we've seen at this point.

但我確實認為，在第四季度，許多現貨參與者和非合約客戶肯定有機會比以前更活躍。我認為進入明年，雖然他們仍處於預測階段，但我預計重型設備行業不會比目前看到更大的削減。

Yes. And then Sam, it's Rick. The other thing I'd add is we've been really expanding our business. So I think offsetting any kind of -- as Andrew said, I'd call it kind of steadiness off of a kind of a down demand period in the last quarter. I think you'll see Olympic Steel actually onboarding new business. We've been very active on the fabrication side with some of the large OEMs. So going into next year, our view is even if we have kind of stable demand from some of these larger OEMs in the heavy equipment sector, I think we've got the opportunity to increase our business.

是的。然後是薩姆，是瑞克。我要補充的另一件事是我們一直在真正擴大我們的業務。因此，我認為抵消任何形式的影響——正如安德魯所說，我將其稱為上季度需求下降時期的穩定性。我想你會看到奧林匹克鋼鐵公司實際上正在進行新業務。我們在製造方面一直非常積極地與一些大型原始設備製造商合作。因此，進入明年，我們的觀點是，即使在重型設備領域一些較大的原始設備製造商對我們有穩定的需求，我認為我們有機會增加我們的業務。

Okay, thanks. That's helpful. I appreciate that. And then next, pipe and tube gross margin of 35% this quarter was the segment's best number of the year, but sales have fallen almost 10% sequentially in both the second and the third quarter. So a two-part question here. Can you address how segment volumes behaved during the third quarter? And then of that $79 million in sales in the third quarter, any way to frame up how much of that's coming from the higher-margin Central Tube and Bar?

好的，謝謝。這很有幫助。我很欣賞這一點。其次，本季管材毛利率為 35%，是該細分市場今年最好的數字，但第二季和第三季的銷售額則是環比下降了近 10%。所以這裡有一個由兩個部分組成的問題。您能否說明第三季的細分市場銷售表現如何？那麼，在第三季 7,900 萬美元的銷售額中，有什麼辦法可以確定其中有多少來自利潤率較高的 Central Tube and Bar 呢？

Hey, Sam, it's Rich. Let me address the gross margin first. So remember, that gross margin includes $2 million of LIFO income. So that 35% is the LIFO number. I think when you take that out, you're pretty much back to the traditional low 30s that we've seen most of this year. I'll let Andrew address the question in terms of -- the fall-off is basically the same industrial customers that we just talked about.

嘿，山姆，我是里奇。讓我先談談毛利率。因此請記住，毛利率包括 200 萬美元的 LIFO 收入。所以 35% 是 LIFO 數字。我認為當你把它去掉時，你幾乎又回到了我們今年大部分時間看到的傳統的 30 多歲。我會讓安德魯來解決這個問題——下降的行業客戶基本上與我們剛才談到的相同。

Well, that's exactly right, Rich. So a number of the customers that we talk about on the sheet and the fabrication side for carbon flat roll, very similar to what we see on the pipe and tube side. Regarding Central Tube, we've been very pleased with what we've seen. A big part of what Central Tube does is fabrication for the OEM, and so we are pleased to see the business there. There's a good focus on data centers. And so we really like that business and expect to see continued progress in fourth quarter and then certainly into next year.

嗯，完全正確，里奇。因此，我們在碳扁捲的板材和製造方面談論的許多客戶，與我們在管道和管材方面看到的非常相似。關於中央管，我們對所看到的感到非常滿意。Central Tube 的大部分業務是為 OEM 製造，因此我們很高興看到那裡的業務。人們非常關注數據中心。因此，我們真的很喜歡這項業務，並期望在第四季度看到持續進展，然後肯定會持續到明年。

And then, Sam, with respect to the value added, I think our pipe and tube segment is north of 40% in terms of value added versus the distribution business.

然後，Sam，就附加價值而言，我認為我們的管道和管材部門的附加價值與分銷業務相比超過 40%。

Yes. And then lastly, Sam, I think part of your question was on the CTB margins. And yes, you are correct, CTB's margins are north of our existing pipe and tube business, which, as you know and commented on, are very strong margins. So -- and we see that continuing.

是的。最後，Sam，我認為你的部分問題是關於 CTB 利潤的。是的，您是對的，CTB 的利潤率高於我們現有的管道和管材業務，正如您所知並評論的那樣，該業務的利潤率非常高。所以——我們看到這種情況仍在繼續。

Okay, thank you. And then one last one for me. If Nippon is able to close on its acquisition of US Steel, what do you think changes both in the marketplace and for Olympic specifically? And remind me, do you have any co-located facilities with US Steel right now?

好的，謝謝。然後是最後一張給我的。如果日本能夠完成對美國鋼鐵公司的收購，您認為市場和奧運具體會發生什麼變化？請提醒我，你們現在與美國鋼鐵公司有同地辦公的工廠嗎？

Yes, Sam, we do. We are -- our Gary facility in Gary, Indiana is on-site at US Steel. We have great relationships with all of the vendors, including the two you mentioned. So I think. for Olympic Steel, obviously, whichever way this deal goes, we would anticipate continuing to be a really good supplier of whoever the future owner is, whether it continues to be US Steel or it continues to be Nippon -- a good customer -- a good customer, sorry.

是的，山姆，我們知道。我們位於印第安納州加里的加里工廠位於美國鋼鐵公司現場。我們與所有供應商都有良好的關係，包括您提到的兩家。所以我認為。對於奧林匹克鋼鐵公司來說，顯然，無論這筆交易以何種方式進行，我們預計無論未來的所有者是誰，無論它仍然是美國鋼鐵公司還是仍然是日本鋼鐵公司，我們都將繼續成為一個真正優秀的供應商－一個好的客戶－一個好的客戶。

All right. Thanks, guys. Good luck on the fourth quarter.

好的。謝謝，夥計們。祝第四季好運。

Thanks, Sam.

謝謝，山姆。

(Operator Instructions) Chris Sakai, Singular Research.

（操作員說明）Chris Sakai，Singular Research。

Hi, good morning. My question is that for carbon flat operating expenses, are a lot of these fixed expenses that can't -- you cannot change? Or what can be done to reduce operating expenses?

嗨，早安。我的問題是，對於碳扁平化營運費用來說，很多固定費用是不能改變的嗎？或可以採取什麼措施來減少營運費用？

Yes, Chris, so a couple of things. So when you look at the face of the operating expenses year over year, it looked like an $8 million increase, but there's really two items that make up almost the entire $8 million. One being that there was a $4 million reduction in operating expenses in the third quarter of 2023 related to the employee retention credit that didn't occur in 2024. And then we had about $3.3 million of CTB operating expenses in the third quarter of 2024 that were not there in 2023.

是的，克里斯，有幾件事。因此，當你逐年查看營業費用時，看起來增加了 800 萬美元，但實際上有兩項幾乎佔了全部 800 萬美元。其中之一是，2023 年第三季營運費用減少了 400 萬美元，這與 2024 年沒有發生的員工保留信貸有關。2024 年第三季度，我們的 CTB 營運費用約為 330 萬美元，而 2023 年則沒有。

So overall, we're kind of flattish in volume. And those operating expenses when you adjust for the one-time items are essentially flattish. One of the things we have seen here in the third quarter, as Andrew noted, we're a little bit slower with some of the industrial OEMs.

總的來說，我們的成交量比較平淡。當你對一次性項目進行調整時，這些營運費用基本上持平。正如安德魯指出的，我們在第三季度看到的一件事是，我們與一些工業原始設備製造商的合作有點慢。

And in some cases, we've reduced or taken out some second shifts that -- in those areas where the sales were down a little bit. Now most of that was not reflected in the third quarter, but we do expect to see that reflected in the fourth quarter once you take out severance and all those kind of things for some of the people that -- where the headcount was reduced.

在某些情況下，我們減少或取消了一些第二輪班——在那些銷售額略有下降的地區。現在，其中大部分都沒有在第三季度反映出來，但我們確實希望看到，一旦你為一些裁員的人支付遣散費和所有類似的費用，這一點就會在第四季度得到體現。

Yes. And the other thing I'd add, Chris, on the fixed versus variable, we talk about it a lot. We disclosed it in our SEC documents. But we also have -- in terms of our incentives, they're highly variable, and they do mirror profitability. And so those things tend to -- on the compensation side also automatically adjust with the profitability up and down. So I'd add that as well.

是的。克里斯，我要補充的另一件事是，關於固定與變量，我們討論了很多。我們在 SEC 文件中披露了這一點。但我們也有——就我們的激勵而言，它們變化很大，而且確實反映了盈利能力。因此，在薪資方面，這些事情往往也會隨著獲利能力的上下而自動調整。所以我也想補充一下。

Okay, thanks. And then a lot -- it sounds like you're doing a lot of internal investments. Is the main goal here to really increase profitability? Is that the main understanding?

好的，謝謝。然後還有很多——聽起來你正在進行大量的內部投資。這裡的主要目標是真正提高獲利能力嗎？這是主要的理解嗎？

Well, obviously, yes. We believe those investments in terms of the return is -- are smart moves. But in addition to the increased profitability, they also enhance our quality, safety, increased productivity. They expand our capacity on those pieces of equipment, so they open up those pieces of equipment to do new business.

嗯，顯然，是的。我們相信這些投資的回報是明智之舉。但除了提高盈利能力之外，它們還提高了我們的品質、安全性和生產力。他們擴大了我們在這些設備上的產能，因此他們開放這些設備來開展新業務。

Some of the new business is in areas that we're growing like coated product in the carbon. So it's really all that. But I think you know from following us, we're also sticklers on the profitability side in terms of justification. So it's all of that. And yes, that obviously is going to lead to improved returns in those areas.

一些新業務屬於我們正在發展的領域，例如碳塗層產品。所以這確實是全部。但我想你透過關注我們就知道，在合理性方面，我們也堅持獲利方面的立場。這就是全部。是的，這顯然會提高這些領域的回報。

Great. Thanks for the input.

偉大的。感謝您的意見。

Thanks, Chris.

謝謝，克里斯。

There are no further questions in queue at this time. I would like to turn the floor back over to Richard Marabito for closing remarks.

目前隊列中沒有其他問題。我想請理查德·馬拉比托 (Richard Marabito) 致閉幕詞。

Thank you very much, operator. And thank you all for joining us on our call today. We genuinely appreciate your continued interest in Olympic Steel. And we look forward to speaking with you again next quarter. Thank you. Have a great day, everyone.

非常感謝您，接線生。感謝大家今天參加我們的電話會議。我們衷心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。謝謝。祝大家有美好的一天。

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。