Olympic Steel Inc (ZEUS) 2025 Q1 法說會逐字稿

Greetings and welcome to the Olympic Steel 2025, first quarter financial results conference call.

大家好，歡迎參加奧林匹克鋼鐵 2025 年第一季財務業績電話會議。

(Conference Instructions)

（會議指示）

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

現在，我想結束與奧林匹克鋼鐵公司首席財務長里奇·曼森的電話會議。先生，請繼續。

Thank you, operator. Welcome to Olympic Steel's earnings call for the first quarter of 2025. 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. 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.

謝謝您，接線生。歡迎參加奧林匹克鋼鐵 2025 年第一季財報電話會議。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 也將參加會議。在我們開始之前，我有幾點提醒。今天電話會議上的一些聲明將具有預測性，旨在根據 1995 年《私人證券訴訟改革法》的安全港條款進行前瞻性陳述，可能無法反映實際結果。

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 10K and 10Q and the press releases filed with the Securities and Exchange Commission.

本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。重要假設、風險、不確定性和其他可能導致實際結果大不相同的因素均在公司向美國證券交易委員會提交的 10K 和 10Q 表格報告和新聞稿中列出。

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-gap measures to the most directly comparable GAAP financial measures is provided in the press release that was issued last night and can be found on our website. Today's live broadcast will be archived and available for replay on the Olympic Steel's website.

在今天的討論中，我們可能會參考調整後每股攤薄淨收益、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差距指標與最直接可比較的 GAAP 財務指標的對賬，您可以在我們的網站上找到。今天的現場直播將存檔並可在奧林匹克鋼鐵公司的網站上重播。

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

現在，我將把電話轉給里克。

Thank you, Rich, and good morning everyone.

謝謝你，Rich，大家早安。

Thank you for joining us today to discuss Olympic Steel's 2025 first quarter results. I'll begin with a summary of our first quarter earnings results, including our strong shipping start to the year, despite a challenging macro environment for the steel industry. Then Andrew will review our segment performance and following that Rich will discuss our financial results in more detail. And then, as always, we'll open up the call for your questions.

感謝您今天加入我們討論奧林匹克鋼鐵 2025 年第一季的業績。我首先要總結我們第一季的獲利結果，包括儘管鋼鐵業面臨嚴峻的宏觀環境，但我們今年的航運業務開局仍然強勁。然後，安德魯將回顧我們各部門的表現，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，我們將開始回答您的問題。

So we've talked a lot in recent years about our strategy to build a stronger, more resilient Olympic steel, one that is positioned to deliver profitable results in any environment. Our first quarter performance during a challenging time for the metals industry reflects the success of these efforts and reinforces our strategy as we move forward. We reported strong shipments in first quarter sales of $493 million with net income of $2.5 million.

因此，近年來，我們多次討論我們的策略，即打造更強大、更有彈性的奧運鋼材，這種鋼材能夠在任何環境下帶來盈利。在金屬產業充滿挑戰的時期，我們第一季的業績反映了這些努力的成功，並強化了我們未來的策略。我們報告第一季出貨量強勁，銷售額達 4.93 億美元，淨收入達 250 萬美元。

All three of our business segments continued to deliver positive EBITDA: Our flat roll shipping volumes were up 24% sequentially and 6% over the prior year, hitting their highest levels since the third quarter of 2021, which was also the height of the post-COVID pricing and demand market. We really saw an increase in demand about halfway through the quarter as customers reacted to the announced 25% steel and aluminum tariffs and contemplated the impact of potential reciprocal tariffs. Andrew will talk more about this in a few moments.

我們所有三個業務部門均繼續實現正的 EBITDA：我們的平板捲運輸量環比增長 24%，同比增長 6%，達到 2021 年第三季度以來的最高水平，這也是後疫情時代定價和需求市場的頂峰。由於客戶對宣布的 25% 鋼鐵和鋁關稅做出反應，並考慮到潛在的互惠關稅的影響，我們確實在本季度中期看到了需求的增長。安德魯稍後將會詳細談論這一點。

We continue to execute on our strategy to grow profitably by diversifying into metal intensive end markets, expanding our fabrication capabilities, and focusing on a richer mix of higher margin metal products. Our commitment to M&A to bolster these areas has proven to be very effective. Our most recent acquisition, MetalWorks, completed in late 2024, is off to an excellent start.

我們將繼續執行我們的策略，透過多元化進入金屬密集型終端市場、擴大我們的製造能力以及專注於更豐富的高利潤金屬產品組合來實現獲利成長。我們致力於透過併購來加強這些領域，事實證明這是非常有效的。我們最近的收購 MetalWorks 於 2024 年底完成，並取得了良好的開端。

As expected, it has been immediately accretive to our results. Building on our successful track record of completing eight acquisitions over the past seven years, we remain committed to M&A as an ongoing source of growth for Olympic steel. We are also committed to making key organic growth investments in our operations that will enhance throughput and safety, and Andrew will detail more about that in a few minutes.

正如預期的那樣，它立即增加了我們的業績。基於我們過去七年成功完成八次收購的記錄，我們將繼續致力於將併購作為奧運鋼鐵持續成長的來源。我們也致力於在營運中進行關鍵的有機成長投資，以提高吞吐量和安全性，安德魯將在幾分鐘內詳細介紹這一點。

At the same time, we've demonstrated our operational discipline by staying focused on what we can control. We are closely managing our working capital and improved our inventory terms as we weather uncertain markets. These efforts drove strong operating cash flow during the quarter, which resulted in a $37 million reduction in our debt.

同時，我們透過專注於我們能夠控制的事情來展示我們的營運紀律。為了因應不確定的市場，我們密切管理營運資金並改善庫存條款。這些努力推動了本季強勁的經營現金流，使我們的債務減少了 3,700 萬美元。

In addition, last week we announced the five-year extension of our $625 million asset-based revolving credit facility. This will continue to provide us with the flexible, low cost capital to fund our continued growth, both organically and through acquisition.

此外，上週我們宣布將 6.25 億美元的資產循環信貸額度延長五年。這將繼續為我們提供靈活、低成本的資本，以資助我們透過有機成長和收購實現持續成長。

While tariffs have dominated the macroeconomic conversation, Olympic steel is well positioned to support increased manufacturing in the United States. Over 90% of our metal supply and almost all of our sales are domestically based, and our fabrication capabilities provide an excellent solution for OEMs looking to onshore, outsource, or simply expand their first stage of manufacturing in the United States.

儘管關稅一直是宏觀經濟討論的焦點，但奧運鋼鐵完全有能力支持美國製造業的成長。我們 90% 以上的金屬供應和幾乎所有的銷售都來自國內，我們的製造能力為尋求在美國境內生產、外包或僅擴大其第一階段製造的原始設備製造商提供了絕佳的解決方案。

And our long standing strong relationships with our domestic mills are also a real benefit in the current tariff environment. As we look ahead, we believe strongly in the Olympic steel that we have been building. We remain confident in our ability to continue to drive profitable growth regardless of market conditions.

在當前的關稅環境下，我們與國內工廠長期保持的牢固關係也帶來了真正的好處。展望未來，我們堅信我們一直在打造的奧運鋼鐵。無論市場狀況如何，我們仍然有信心繼續推動獲利成長。

I'll now turn the call over to Andrew.

我現在將電話轉給安德魯。

Thank you, Rick, and good morning everyone. It certainly has been an interesting time for the steel industry, with a number of dynamics shaping our current environment, most notably the tariffs on steel and aluminum imports. After the initial announcement of 25% steel and aluminum tariffs in January, hot roll pricing escalated quickly, increasing more than 30% during the quarter. As customers scramble to digest the news, spot orders increased significantly.

謝謝你，里克，大家早安。對於鋼鐵業來說，這無疑是一個有趣的時期，許多動態因素影響著我們當前的環境，最顯著的就是對鋼鐵和鋁進口徵收關稅。今年 1 月首次宣布對鋼鐵和鋁徵收 25% 的關稅後，熱捲價格迅速上漲，本季上漲了 30% 以上。隨著客戶爭相消化這項消息，現貨訂單大幅增加。

During the first quarter of 2025, Olympic Steel had its strongest flat rolled shipping volume since the third quarter of 2021, which was the peak of post-COVID demand. And as you may recall, we still owned our former Detroit facility back then. Increased shipping levels along with our end products businesses drove strong performance in our carbon segment with EBITDA of $10.9 million.

2025 年第一季度，奧林匹克鋼鐵公司的扁平材出貨量創下了 2021 年第三季度以來的最高水平，而 2021 年第三季度正是新冠疫情後需求的高峰。您可能還記得，當時我們仍然擁有我們以前的底特律工廠。運輸水準的提高以及最終產品業務的開展推動了我們碳部門的強勁表現，EBITDA 達到 1,090 萬美元。

In addition, continued growth in our coded carbon steel product line, a higher margin product had a positive impact on performance. Also of note, we were recognized as a partner level supplier for 2024 in the John Deere Achieving Excellence program. This is John Deere's highest supplier rating. We are incredibly proud to receive this recognition from our longtime customer and respected global OEM. Congratulations to our entire team on this great achievement.

此外，我們的編碼碳鋼產品線持續成長，利潤率較高的產品對業績產生了正面影響。同樣值得注意的是，我們被約翰迪爾卓越成就計畫評為 2024 年合作夥伴級供應商。這是約翰迪爾的最高供應商評級。我們非常自豪能夠獲得長期客戶和受尊敬的全球 OEM 的認可。恭喜我們整個團隊取得這項偉大成就。

The pipe and tube market, which typically lags our carbon performance by 3 to 6 months, experienced slower OEM orders similar to what the carbon market experienced during the second half of 2024. However, the segments still delivered EBITDA of $6.4 million. We are confident the team's focus on sales growth, margin improvement, and fabricated product expansion will continue to drive positive results for this business.

管材市場通常比我們的碳表現滯後 3 至 6 個月，其原始設備製造商訂單速度放緩，與碳市場在 2024 年下半年經歷的情況類似。然而，這些部門的 EBITDA 仍達到 640 萬美元。我們相信，團隊對銷售成長、利潤率提高和製造產品擴張的關注將繼續為該業務帶來積極的成果。

The specialty metal segment, despite continually falling nickel surcharges, had a solid quarter reporting EBITDA of $3.6 million. We continue to invest in the growth and expansion of specialty metals. In March, we opened our new facility in Houston. The 105,000 square foot facility will increase the action stainless Houston operations footprint by an additional 73,000 square feet. Expanding our distribution fabrication capabilities in the Southwest.

儘管鎳附加費持續下降，特種金屬部門本季仍表現穩健，EBITDA 達到 360 萬美元。我們繼續投資於特種金屬的成長和擴張。三月份，我們在休士頓開設了新工廠。該工廠佔地 105,000 平方英尺，將使休士頓不銹鋼公司的營運面積再增加 73,000 平方英尺。擴大我們在西南地區的分銷製造能力。

Other planned capital investments remain on track, with most expected to become operational later this year or in early 2026. These include a new cut to length line at our Minneapolis coil facility to support our growing coded business, a new high-speed light gauge narrow width specialty metal slitter to expand our Berlin metal's unique slitting capacity outside Chicago, a new white metals cut to length line in Schomburg, Illinois in the automation of our Chambersburg Fabrication operation.

其他計劃中的資本投資仍在按計劃進行，預計大部分將於今年稍後或 2026 年初投入營運。這些包括位於明尼阿波利斯線圈工廠的一條新的定長切割線，以支持我們不斷增長的編碼業務，一條新的高速輕型窄寬度特種金屬分切機，以擴大我們在芝加哥以外柏林金屬公司獨特的分切能力，一條新的白色金屬定長切割線，位於伊利諾伊州紹姆堡，用於我們錢伯斯堡製造業務的自動化。

These investments will continue to expand our capacity and enhance our safety and drive efficiency in targeted growth areas of our business. As Rick said earlier, we have built a more resilient Olympic steel, and we are confident in our strategy and position in the market.

這些投資將繼續擴大我們的產能、提高我們的安全性並提高我們業務目標成長領域的效率。正如里克之前所說，我們已經打造了更具韌性的奧運鋼鐵，並且對我們的策略和市場地位充滿信心。

As always, we will continue to control what we can control. While many market inputs and macroeconomic variables will no doubt continue to change. We strongly believe the combination of these efforts keep us well positioned to continue to grow and deliver profitable results under all market conditions. Now I'll turn the call over to Rich.

一如既往，我們將繼續控制我們能夠控制的事情。儘管許多市場投入和宏觀經濟變數無疑將繼續發生變化。我們堅信，這些努力將使我們在任何市場條件下都能夠繼續成長並實現盈利。現在我將把電話轉給里奇。

Thank you, Andrew. As you have heard from Rick and Andrew, our team did an excellent job on the first quarter to navigate macroeconomic headwinds to deliver solid performance to the start of the year. Before I discuss the results in more detail, I want to remind you that comparisons are impacted by the November 2024 acquisition of MetalWorks, whose results are included in the carbon segment.

謝謝你，安德魯。正如 Rick 和 Andrew 所說，我們的團隊在第一季表現出色，克服了宏觀經濟逆風，在年初取得了穩健的表現。在我更詳細地討論結果之前，我想提醒您，比較受到了 2024 年 11 月收購 MetalWorks 的影響，其結果包含在碳部門中。

For the first quarter, net income totaled $2.5 million compared with $8.7 million in the first quarter of 2024. EBITDA in the first quarter was $16.1 million compared with $23.3 million in the prior year period. There was no LIFO adjustment in the first quarter of 2025 compared with $400,000 of LIFO expense in the first quarter of 2024. Consolidated operating expenses for the first quarter totaled $110.6 million compared with $103.2 million in the first quarter of 2024.

第一季淨收入總計 250 萬美元，而 2024 年第一季淨收入為 870 萬美元。第一季的 EBITDA 為 1,610 萬美元，而去年同期為 2,330 萬美元。2025 年第一季沒有進行後進先出法調整，而 2024 年第一季的後進先出法費用為 40 萬美元。第一季綜合營運費用總計 1.106 億美元，而 2024 年第一季為 1.032 億美元。

Our first quarter 2025 operating expenses reflect the addition of metalworks 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. As a reminder, we do not report tons sold for McCullough Industries, EZ-Dumper, Metal-Fab, Shaw Stainless, or the entire pipe and tube segment.

我們的 2025 年第一季營運費用反映了未報告銷售噸位的金屬製品的增加。因此，合併層面和碳部門的每噸營業費用將逐年增加。提醒一下，我們沒有報告 McCullough Industries、EZ-Dumper、Metal-Fab、Shaw Stainless 或整個管道和管材部門的銷售噸位。

Consolidated operating expenses for the first quarter include operating expenses associated with shipping 6% more volume year over year, $2.5 million of metalworks operating and acquisition related expenses, and $500 million of lower incentive expenses when compared with the first quarter of 2024. Our team's excellent working capital management drove strong operating cash flow, which enabled us to pay down debt by $37 million since year end, lowering our total debt to $235 million at the end of the first quarter.

第一季綜合營運費用包括與運輸量年增 6% 相關的營運費用、250 萬美元的金屬製品營運和收購相關費用，以及與 2024 年第一季相比降低 5 億美元的激勵費用。我們團隊出色的營運資本管理推動了強勁的營運現金流，這使我們能夠自年底以來償還 3,700 萬美元的債務，使我們的總債務在第一季末降至 2.35 億美元。

On April 22, we announced a five-year extension of our $625 million asset-based revolving credit facility. Immediately after the extension, we had approximately $269 million of availability under the facility, providing us with an excellent source of flexible, low-cost capital to fund strategic growth initiatives. Our capital expenditures totaled $8.8 million in the first quarter of 2025 compared to depreciation of $6.5 million.

4 月 22 日，我們宣布將 6.25 億美元的資產循環信貸額度延長五年。延期後，我們立即在該貸款安排下獲得了約 2.69 億美元的可用資金，這為我們提供了靈活、低成本的優質資金來源，以資助戰略增長計劃。2025 年第一季度，我們的資本支出總計 880 萬美元，而折舊支出為 650 萬美元。

We estimate that 2025 capital expenditures will be approximately $35 million as we continue to invest in automation and other growth initiatives that Andrew mentioned earlier. Our first quarter 2025 effective tax rate was 30.1% compared with 27% in the same period last year. We expect our 2025 tax rate to approximate 28%. In addition, we paid a quarterly dividend of $0.16 per share in the first quarter. Our board of directors approved our next regular quarterly cash dividend of $0.16 per share, which is payable on June 16, 2025, to shareholders of record on June 2, 2025. The company is now paid regular quarterly dividends dating back to 2006.

我們估計，由於我們將繼續投資於自動化和安德魯之前提到的其他成長計劃，2025 年的資本支出將約為 3,500 萬美元。我們的 2025 年第一季有效稅率為 30.1%，而去年同期為 27%。我們預計 2025 年的稅率約為 28%。此外，我們在第一季支付了每股 0.16 美元的季度股息。我們的董事會批准了下一季定期現金股息，為每股 0.16 美元，將於 2025 年 6 月 16 日支付給 2025 年 6 月 2 日登記在冊的股東。該公司自 2006 年以來一直定期支付季度股息。

Before we open the call for your questions, I would like to thank the entire Olympic Steel team for all their efforts in the first quarter. It's because of the team's hard work and dedication that Olympic Steel remains in a strong operational and financial position and is equipped to manage through a challenging market environment while continuing to advance our strategy.

在我們開始回答大家的問題之前，我想感謝整個奧運鋼鐵團隊在第一季所做的一切努力。正是由於團隊的辛勤工作和奉獻精神，奧林匹克鋼鐵公司才保持了強大的營運和財務狀況，並有能力在充滿挑戰的市場環境中進行管理，同時繼續推進我們的策略。

Operator, we are now ready for questions.

接線員，我們現在可以回答問題了。

(Conference Instructions)

（會議指示）

Thank you. Our first question is from Samuel McKinney with KeyBanc Capital Markets.

謝謝。我們的第一個問題來自 KeyBanc Capital Markets 的 Samuel McKinney。

Hey, good morning guys.

嘿，大家早安。

Good morning, SAM.

早上好，SAM。

Hey, starting in carbon flat, volumes were up about 25% versus the fourth quarter's well ahead of your normal seasonality and the MSCI figures. We've been hearing a lot about pull forward demand during this earning cycle, and I was curious if you could frame up how much of that first quarter volume boost has to do with that?

嘿，從碳價持平開始，交易量與第四季度相比上漲了約 25%，遠遠超出了正常的季節性和 ​​MSCI 數據。我們聽到了很多關於此獲利週期內提前需求的說法，我很好奇您是否可以解釋一下第一季銷售成長與此有多少關係？

Yes, Sam, this is Andrew. I would say a lot of it. So traditionally, our sales are call it 6535 from a contract Versus spot. It was stronger this quarter on the spot side of it, so we certainly saw some great activity, and some pull ahead relatively early. In the in the quarter and it really helped propel the strength of the of the carbon sales.

是的，山姆，這是安德魯。我會說很多。因此傳統上，我們的銷售被稱為 6535（合約與現貨）。本季現貨方面表現更為強勁，因此我們確實看到了一些出色的活動，並且有些活動相對較早地取得了領先。在本季度，它確實幫助推動了碳銷售的成長。

Yes, and I'd say Sam, it's Rick. The other, I guess, way to look at it is typically and I think Rich, you calculate the number, but typically seasonally fourth quarter to first quarter worldwide is10% to 12% up that would kind of be a normal Increase. So certainly, we lapped that we doubled it and as Andrew said, a big piece of that extra was certainly in the spot business.

是的，我會說 Sam，他是 Rick。我想，另一種看待這個問題的方式是，通常情況下，我認為 Rich，你可以計算一下數字，但通常情況下，全球第四季到第一季的季節性成長是 10% 到 12%，這是正常的成長。因此，我們當然將其翻倍，正如安德魯所說，其中很大一部分額外收入肯定來自現貨業務。

Understood. And then I know first quarter tends to be the strongest revenue quarter for pipe and tube, given the rebates. Are you expecting that to hold true this year off the $77 million baseline you set in the first quarter, or could we see some improvement as the year progresses?

明白了。然後我知道，考慮到回扣，第一季往往是管道收入最強勁的季度。您是否預計今年的業績會保持在第一季設定的 7,700 萬美元的基數上，還是說隨著時間的推移我們會看到一些改善？

Yes, SAM, so the pipe and tube segment didn't certainly see the same bump up in sales that the carbon segment saw, and that's primarily because they're more contractual based than spot based. And so as Andrew walked you through the increase in spot sales, you didn't see that in the pipe and tube segments. I think what they're seeing is kind of that continued malaise that we saw in the back half of 2024 for the carbon segment for OEMs and keep in mind they basically lag 3 months to 6 months. And so right now what we're seeing, I think the pipe and tube segments, going into Q2 looks a lot like Q1.

是的，SAM，因此管道和管材部分的銷售額肯定沒有像碳部分那樣出現相同的增長，這主要是因為它們更多地基於合約而不是基於現貨。因此，當安德魯向您介紹現貨銷售的成長時，您並沒有在管道和管材領域看到這一點。我認為他們看到的是我們在 2024 年下半年看到的原始設備製造商碳細分市場的持續低迷，請記住，他們基本上落後 3 到 6 個月。所以現在我們看到的是，我認為進入第二季的管道和管材部分與第一季非常相似。

Okay. And then last one for me, given your five-year extension on that ABL, talk us through your current appetite for M&A and potential areas you're looking to bolster and how does the marketplace look now compared to prior recent periods?

好的。然後最後一個問題，考慮到您對 ABL 的五年延期，請談談您目前對併購的興趣以及您希望加強的潛在領域，以及與前段時期相比，現在的市場狀況如何？

Yes, it's Rick. Great question.

是的，他是瑞克。好問題。

Certainly M&A continues to be one of the key pieces of our strategic growth for Olympic. We've talked a lot about that. That certainly remains. We're active looking. You are right. I think last call we had, I probably commented that we saw some of the inflow the pipeline in terms of candidates slower that kind of continued through the first quarter.

毫無疑問，併購仍然是奧林匹克策略成長的關鍵部分之一。我們已經討論過很多次了。這當然仍然存在。我們正在積極尋找。你是對的。我想我們上次通話時，我可能會評論說，我們看到候選人的流入速度有所放緩，這種情況持續到了第一季。

But I tell you, in April we've started to see a return of potential sellers and candidates who are really interested in dialoguing, so it's going to continue to be, you see our track record we've done 8 years and 7 years, so it's going to continue to be a big piece of our growth strategy going forward. We'd anticipate really continuing on the pace that you've seen us do over the last 5 years to 7 years.

但我告訴你，四月我們開始看到真正有興趣對話的潛在賣家和候選人的回歸，所以這種情況會繼續下去，你看我們已經做了 8 年和 7 年的記錄，所以這將繼續成為我們未來成長策略的重要組成部分。我們預計我們將繼續保持過去 5 至 7 年的發展速度。

Okay, would you be disappointed if you didn't get a deal done this year?

好的，如果今年沒有達成交易，您會失望嗎？

You like repeating that line I use.

你喜歡重複我說的那句話。

Yes.

是的。

I would certainly I think, we're trying to do at least one a year and have been successful doing that and I don't see why, we wouldn't continue at that pace.

我肯定會，我想，我們正試圖每年至少做一次，並且已經成功做到了這一點，我不明白為什麼我們不會繼續以這樣的速度進行。

Okay, thanks guys good luck.

好的，謝謝大家，祝你好運。

Thanks Sam

謝謝薩姆

Our next question is from Dave Storms with Stonegate.

下一個問題來自 Stonegate 的 Dave Storms。

Hey good morning everyone, thanks for taking the questions.

大家早安，感謝你們回答問題。

Want to circle back to pipe and tube and maybe a sense of what the outlook might be beyond Q2, you mentioned obviously that it lags, but are you seeing buying patterns that might indicate more of a muted response relative to carbon flats, or do you think it'll be more of a draft and slingshot situation where the market realizes that they need to kind of get ahead of some of those?

想回到管道和管材的話題，也許可以了解一下第二季度以後的前景，您顯然提到了它的滯後，但您是否看到購買模式可能表明對碳平板的反應更加溫和，或者您是否認為這更像是一種草案和彈弓的情況，市場意識到他們需要領先於其中一些情況？

No, I think we'll see a more traditional year for Pipe and Tube. I think the area that we will see continued opportunities is going to be onshoring opportunities. So, a couple of areas that Pipe and tube has been very strong, certainly with data centers. It's a big part of their growth, but really with the onshoring opportunities on both our flat roll and our pipe and tube is really where we expect to see some great opportunities.

不，我認為我們將會看到管道和管材行業更傳統的一年。我認為，我們將看到持續機會的領域是在岸外包機會。因此，管道在幾個領域表現非常強勁，尤其是資料中心。這是他們成長的重要組成部分，但實際上，隨著我們的扁平捲和管材的在岸生產機會的出現，我們確實有望看到一些巨大的機會。

A through '25 and probably beyond, and we're well prepared for it, with CTI and now CTB we can really service fabrication customers who've got 20 high speed sophisticated tube lasers really positioned well in the Southwest in our traditional Chicago tube and iron facilities, Chicago, Minneapolis, Locus, as well as some others are really positioned well and our flat rule side of it, the same thing, so. We've invested, as a lot in the flat role side of our fabrication.

到 25 年甚至更久以後，我們已經做好了充分的準備，通過 CTI 和現在的 CTB，我們可以真正為製造客戶提供服務，這些客戶擁有 20 台高速精密管激光器，這些激光器在我們傳統的芝加哥管和鐵工廠的西南部位置很好，芝加哥、明尼阿波利斯、Locus 以及其他一些工廠的位置也很好，我們的平尺方面也是如此。我們在平板製造方面投入了大量資金。

A couple specific facilities are Beauford, Georgia and our Bartlett, Illinois facilities, but also, in Bettendorf and Chambersburg and Mount Sterling on the flat role side we put a lot of money into the fabrication and are anticipating, as we have seen some great opportunities that we've seen really in the last 30 days for big growth there.

一些特定的工廠是喬治亞州的博福德和伊利諾伊州的巴特利特工廠，此外，在貝滕多夫、錢伯斯堡和斯特靈山的平板生產方面，我們也投入了大量資金進行製造，並且期待著這些工廠的製造，因為我們在過去 30 天裡看到了一些很好的機會，這些機會確實會帶來巨大的增長。

That's fantastic call.

這真是一個絕妙的電話。

Thank you. And then just one more for me, just would love to get your thoughts on, your working capital, and maybe inventory management to try to cover for the 10% and that'll supply that that's not domestic. Any thoughts there would be great.

謝謝。然後我再問一個問題，我很想聽聽您的想法，您的營運資金和庫存管理可以嘗試彌補 10% 的缺口，而這些缺口不是國內的。任何想法都很棒。

Yes, I'll touch the working capital and then I'll let Andrew talk about the supply base. So, Dave, yes, we do, we did take debt down $37 million in Q1, and part of that was taking inventory down. I would expect, to see maybe a modest decrease in debt during Q2, but I'm not expecting a whole lot as we've been talking on these calls, we really expect the large reduction in debt to come in the back half of the year, and we see no reason why, by year end we couldn't. Back down in the low 200s in terms of borrowing on our debt. So, Andrew I'll let you talk about the supply base.

是的，我會談營運資金，然後讓安德魯談談供應基礎。所以，戴夫，是的，我們確實在第一季減少了 3700 萬美元的債務，其中一部分是減少庫存。我預計，第二季債務可能會小幅減少，但我並不期望減少太多，正如我們在電話會議上所說的那樣，我們確實預計債務將在今年下半年大幅減少，而且我們認為沒有理由認為到年底我們無法實現這一目標。就我們的債務借款而言，回落至 200 以下。那麼，安德魯，我讓你談談供應基地。

No, I think our inventories are appropriate levels. I think as you saw in the MSCIR report, a lot of the service centers were sitting with too much inventory coming into 2025. I think we are in really good position, continue to be as into the second quarter, and expect that, the supply will be relatively stable as we head into the balance of the year. I think we are well positioned because we're the majority of our material comes from the domestic supply, so tariffs really are not going to impact us relative to that side of it, and we think that there's fine availability domestically to support our growth.

不，我認為我們的庫存處於適當的水平。我認為，正如您在 MSCIR 報告中看到的，到 2025 年，許多服務中心的庫存過剩。我認為我們目前處於非常有利的地位，並將持續到第二季​​度，並且預計在進入今年年底時，供應將相對穩定。我認為我們處於有利地位，因為我們的大部分材料來自國內供應，因此關稅實際上不會對我們造成影響，而且我們認為國內有良好的供應來支持我們的成長。

That's fantastic thank you very much and good luck in to you.

太棒了，非常感謝，祝你好運。

Thanks.

謝謝。

Our next question is from Chris Sakai with Singular Research.

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

Yes, hi, Good Morning. Just had a question on carbon flat looks like op operating expenses took a jump up from last year. Was that from acquisitions and how are you managing that going forward?

是的，你好，早安。我剛剛對碳排放平緩有一個疑問，看起來營運費用比去年增加。這是透過收購實現的嗎？您今後將如何管理它？

Yes, Chris, really caused by two things, one being the acquisition of MetalWorks. Remember that occurred in November '24. So when you're comparing Q1 versus Q1, there's about $2.5 million extra operating expenses that weren't there last year but associated with a with a great growth company in metalworks. And then we shipped, quarter-over-quarter, we were 24% up in volume and 6% in volume up year over year.

是的，克里斯，實際上是由兩件事引起的，一是收購 MetalWorks。記得那件事發生在 1924 年 11 月。因此，當您將第一季與第二季進行比較時，您會發現大約有 250 萬美元的額外營運費用，這些費用是去年沒有的，但與一家金屬製品行業的高成長公司有關。然後，我們的出貨量與上一季相比成長了 24%，與去年同期相比成長了 6%。

And so, those tons have to be processed. Those tons have to be shipped, and that's really what you're seeing an increase in warehouse and processing and then an increase in distribution expense associated with that volume growth. And we continue to monitor our expenses on the same store basis. You know what we continue to see is our inflation, adjusting for volume is essentially, in the low single digits as far as inflation goes, say 1% to 2%. And that's after giving people a 3% cola raise at the beginning of the year. So we think the operating expenses on the same store basis continue to be managed very well.

因此，這些噸重的貨物必須被處理。這些噸貨物必須運輸，這就是您所看到的倉儲和加工費用增加的原因，然後隨著數量增長，配送費用也會增加。我們將繼續以同一家商店為基礎監控我們的開支。您知道我們繼續看到的是我們的通貨膨脹，經過數量調整後，通貨膨脹率基本上處於低個位數，例如 1% 到 2%。這還是在年初為人們增加了 3% 的可樂價格之後。因此我們認為同店營業費用仍然得到很好的管理。

Okay, thanks for that. And then, with all the tariff talk, how is that affecting your M&A strategy? Is it hurting it or helping you?

好的，謝謝。那麼，關於關稅的討論對你們的併購策略有何影響？它對你有害還是有幫助？

I tell you, really not an impact directly. We are domestic based. All of our acquisitions have been in the US at this point. We're not really looking at foreign acquisitions. What I would tell you is the tariff impact really has a greater impact on our fabricating business, and Andrew talked about that. I mean we are exceptionally well prepared should the big bet that this administration is doing on bringing back manufacturing to the United States actually takes place, we're exceptionally positioned to take advantage of that.

我告訴你，真的不會直接造成影響。我們立足於國內。目前，我們所有的收購都在美國進行。我們實際上並沒有考慮海外收購。我想告訴你的是，關稅的影響確實對我們的製造業務有更大的影響，安德魯也談到了這一點。我的意思是，如果本屆政府將製造業帶回美國的大賭注真的實現，我們已經做好了充分的準備，我們完全有能力利用這一點。

So, I think from an M&A front you'll continue tMacola o see us do what we've done in the past, which is find service and distribution businesses that are very successful and then just as importantly continue to buy and manufacturing companies so really the tariff impact I tell you, has more of a, I think more of an impact on, the core business going forward than really impact on M&A.

因此，我認為從併購方面來看，你會看到我們繼續做我們過去所做的事情，那就是尋找非常成功的服務和分銷企業，然後同樣重要的是繼續購買和製造公司，所以我告訴你，關稅的影響實際上對未來的核心業務的影響比對併購的影響更大。

And as I stated earlier, I think you know there was a little trepidation as the year started in terms of the capital markets and M&A, and that's probably why we saw a little bit of a slow slowdown in the pipeline. But I think as companies are getting a little more used to and you hate to say used to the changes out of DC, but I think people are getting a little more comfortable and we're seeing certainly more companies come into the pipeline.

正如我之前所說，我想你知道，今年年初在資本市場和併購方面存在一些擔憂，這可能是我們看到籌備工作進展緩慢的原因。但我認為，隨著公司越來越習慣（你不願意說習慣 DC 的變化），但我認為人們越來越適應了，我們肯定會看到越來越多的公司加入這個行業。

Do you think that the tariffs will increase competition for acquisitions?

您認為關稅會加劇收購競爭嗎？

Yes, I do. I mean, I think if this plays out as planned and we continue to build our manufacturing base in the United States, I could certainly see some others choosing to grow more quickly through an M&A route versus a capital expenditure investment route. So, I think that's sort of one stream where you may see M&A increase.

是的，我願意。我的意思是，我認為如果一切按計劃進行，並且我們繼續在美國建立我們的製造基地，我肯定會看到一些其他公司選擇通過併購途徑而不是資本支出投資途徑實現更快的增長。所以，我認為這是您可能會看到併購增加的一種趨勢。

Okay, great, thanks.

好的，太好了，謝謝。

Thank you, thanks Chris.

謝謝，謝謝克里斯。

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Richard Marabito for any closing comments.

謝謝。目前沒有其他問題。我想將發言權交還給 Richard Marabito，請他發表最後評論。

Thank you, operator, and thank you everyone for joining us today on our call. We certainly appreciate your continued interest in Olympic steel and look forward to speaking with you again next quarter. Have a great day, everyone. Bye-bye.

謝謝接線員，也謝謝大家今天參加我們的電話會議。我們非常感謝您對奧林匹克鋼鐵的持續關注，並期待下個季度再次與您交談。祝大家有個愉快的一天。再見。

This concludes today's conference. You may disconnect your lines at this time.

今天的會議到此結束。現在您可以斷開線路。

Thank you for your participation.

感謝您的參與。