Reliance Steel & Aluminum Co

NYSE:RS

Earnings Call Transcript 2022-Q3

[Operator]

Greetings and welcome to the Reliance Steel & Aluminum Company Third Quarter 2022 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to introduce your host, Ms. Kim Orlando.

[Kimberly Orlando, ADDO Investor Relations]

Thank you, operator. Good morning and thanks to all of you for joining our conference call to discuss Reliance’s third quarter 2022 financial results. I am joined by Jim Hoffman, Chief Executive Officer; Karla Lewis, President; and Arthur Ajemyan, Senior Vice President and Chief Executive Officer. Steve Koch, Executive Vice President and Chief Operating Officer, will also be available during the question-and-answer portion of today’s call.

A recording of this call will be posted on the Investors section of our website at investor.rsac.com. The press release and the information on this call may contain certain forward-looking statements which are based on a number of assumptions that are subject to change and involve known and unknown risks, uncertainties or other factors, including the impacts of inflation, geopolitics and the COVID-19 pandemic and related economic conditions on our future operations which may not be under the company’s control and may cause the actual results, performance or achievement of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include but are not limited to, those factors disclosed in the company’s annual report on Form 10-K for the year ended December 31, 2021, under the caption Risk Factors, disclosure in our press release this morning and other documents, Reliance files or furnishes with the Securities and Exchange Commission. The press release and the information on this call speak only as of today’s date and the company disclaims any duty to update the information provided therein and herein.

I will now turn the call over to Jim Hoffman, Chief Executive Officer of Reliance.

[Jim Hoffman, Chief Executive Officer]

Thank you, Kim. Good morning, everyone and thank you all for joining us today to discuss our third quarter 2022 financial results.

Before I begin, I'd like to mention the announcement we issued 2 weeks ago regarding our executive leadership succession plan. After much personal deliberation, I have decided to step down as CEO of Reliance on December 31 of this year. I am very pleased that Karla will succeed me as the Reliance Chief Executive Officer on January 1, 2023, at which time I will transition to the role of Senior Advisor to facilitate the transition of my responsibilities to Karla until my retirement in December of 2023. And I will also retain my seat on the Reliance Board.

This announcement is the culmination of a deliberate long-term strategic succession plan developed in conjunction with our Board of Directors. I've had a good fortune and great privilege to work very closely with Karla for many years and I know that our customers, suppliers, stockholders and colleagues will be in very good hands with her at the helm. Karla is a proven leader and executive and I'm extremely confident that she is the right person to lead Reliance going forward. I'm very proud of many accomplishments we've achieved at Reliance over the last several years and I am extremely grateful for the great opportunity and privilege to have been the CEO of this wonderful family of companies.

I will begin now with an overview of our performance and capital allocation activities in the third quarter. Karla will then speak to our operating results and demand trends by end markets and Arthur will conclude with a review of our financial results and our fourth quarter outlook.

Turning to our third quarter results. Reliance's proven business model, including our diverse operations and commitment to best-in-class customer service produced another quarter of solid financial performance. Demand was somewhat better than we had anticipated in the majority of the end markets we serve which coupled with outstanding operational execution drove strong quarterly net sales of $4.25 billion. As anticipated, metal price declines during the quarter led to a temporary compression of our gross profit margin but we nonetheless achieved strong diluted earnings per share of $6.45 which were the highest in our history for a third quarter.

We believe our third quarter results highlight the resilience of our unique business model which along with consistent, strong operational execution by all of our colleagues enabled strong performance during volatile pricing and demand environments. In the third quarter, our diversification strategy benefited our results as the recovery in certain areas such as aerospace, energy and semiconductor helped moderate declines in our third quarter average selling price, gross profit margins and tons sold and our performance of value-added processing on approximately 50% of the orders contributed to our industry-leading gross profit margin profile and provided stability to our gross profit margin despite declining metal prices.

Another key attribute of the Reliance model is our strong cash flow generation. During the third quarter, we generated record quarterly cash flow from operations of $635.7 million, driven by ongoing strength in our profitability combined with effective working capital management which helps fuel our growth both and long-standing history of solid stockholder returns. Our focus on growth remains balanced between organic and acquisition opportunities. Our full year capital expenditure budget remains at $455 million, with an expected total cash outlay of $300 million to $350 million depending on ongoing extended lead times throughout the supply chain. While we did not complete any acquisitions during the third quarter, the pipeline of potential opportunities remains healthy.

We're also pleased to return nearly $390 million to our stockholders in the third quarter through a combination of quarterly dividends and common stock repurchases. Arthur will elaborate on our stockholder return activity shortly. In closing, despite increased uncertainties, we are confident our managers in the field will successfully navigate pricing headwinds and inflationary pressures on operating costs as they have in the past to deliver superior performance. Our record cash flow from operations positions us very well to continue to invest in and grow our businesses as we anticipate increased opportunities from the infrastructure bill and reshoring trends in the United States.

Thank you for your time and attention today. I will now turn the call over to Karla, who will review our third quarter operating results and demand trends. Karla?

[Karla Lewis, President & Director]

Thanks, Jim and good morning, everyone. Before I begin, I would like to acknowledge Jim for his significant contributions to Reliance, both during his tenure as CEO and throughout his many years of service to our company. Jim's leadership helped us achieve sequential record-setting financial results, improved safety performance and inspired outstanding operational execution through varying economic environments and global pandemic. Thank you for your friendship and all that you have done for Reliance, Jim. I wish you all the best in your upcoming retirement.

I am honored to serve as Reliance's next CEO and I am grateful for the trust and confidence that the board has placed in me. I'm excited to continue working together with our experienced and strong operational leadership as well as all of the incredibly talented people throughout Reliance to extend our history of delivering industry-leading results and increasing stockholder value.

Now, I'll turn to our third quarter operational performance. First and foremost, I'd like to thank our folks in the field for their solid execution during the quarter while navigating ongoing macroeconomic challenges, including historically high inflation, recessionary concerns, labor shortages and various other supply chain disruptions. Our steady leadership, focus on safety and commitment to customer service allowed us to once again outperform. Our tons sold were down 3.4% from the second quarter at the low end of our expected range of down 3% to 5%. Our shipment levels were impacted by normal seasonal patterns for the first time since 2019 which includes a decline in shipping volumes due to planned customer shutdowns and vacation schedules.

The better-than-expected performance was primarily driven by strong demand in nonresidential construction and ongoing healthy demand conditions in the broader manufacturing sector reliance serves and, to a lesser extent, robust semiconductor and aerospace shipments. Similar to the last several quarters, we believe our third quarter shipments could have been even stronger had it not been for the persistence of labor shortages and other supply chain-related disruptions at our customers' facilities.

Our average selling price per ton sold of $3,039, declined 6.2% compared to record pricing in the second quarter of 2022 which was in line with our expectation of down 5% to 7%. Prices for carbon flat-rolled products have been declining through most of 2022 and seem to be at or near their trough. However, beginning in the second quarter, downward pricing pressure also extended to most of the other carbon steel products we sell along with stainless and aluminum products which continued through the third quarter.

That said, continued strong demand for the higher-priced products sold into the semiconductor, aerospace and energy markets helped offset some of the downward pricing pressure on our average selling price. While we believe we may see some continued pricing declines at more moderate levels, it's important to highlight that current pricing for most of the products we sell remains at historic highs. As we have experienced in prior cycles, declining pricing levels led to temporary compression in our gross profit margin during the third quarter of 2022 to 29.2%.

On a non-GAAP FIFO basis which is how we monitor our day-to-day operating performance, our gross profit margin declined to 28.6% from 32.2% in the prior quarter. I'd like to emphasize that we believe this gross profit margin compression will be temporary as we sell through our higher cost inventory. The benefit of Reliance's size is our ability to move our higher cost metal more quickly by utilizing our broad network of service centers.

I'll now turn to a high-level overview of the trends we are seeing within our key end markets. Demand for nonresidential construction which includes infrastructure and is the largest end market we serve, remained fairly stable with the second quarter of 2022 and ahead of last year's levels. Although not included in our tons sold, demand for the toll processing services we provide to the automotive market showed a notable improvement compared to the prior quarter despite ongoing supply chain challenges. Demand across the broader manufacturing sectors we serve, including industrial machinery, consumer products and heavy equipment experienced expected seasonal declines in the third quarter compared to the second quarter.

And that said, our broader manufacturing sector improved compared to the third quarter of 2021 with underlying manufacturing demand remaining at healthy levels. Semiconductor demand remained robust during the third quarter and continues to be one of our strongest end markets. We're continuing to make significant investments in this important market to support the expansion of semiconductor fabrication in the United States.

Commercial aerospace demand continued to recover with our shipments improving over the second quarter and also year-over-year for the third consecutive quarter since the onset of the pandemic. As a reminder, roughly half of our exposure to aerospace is commercial. Demand in the military, defense and space portions of our aerospace business remains strong with healthy backlog. Finally, demand in the energy sector experienced normal seasonality compared to the second quarter of 2022. We are optimistic that underlying demand trends in the fourth quarter will remain healthy across most of the end markets we serve with continued pent-up demand at our customers carrying into 2023. We are confident our managers in the field will successfully navigate pricing headwinds and other obstacles as they have done many, many times in the past to continue Reliance's solid operating performance in the coming quarters. We appreciate the contributions made by each of our 15,000 colleagues every day.

I will now turn the call over to Arthur to review our financial results and provide more details on our demand and pricing outlook for the remainder of the year.

[Arthur Ajemyan, Senior Vice President & Chief Financial Officer]

Thanks, Karla. Good morning, everyone and thank you for joining us today. First, I'd like to congratulate both Jim and Karla on their well-earned career transition. It remains my great privilege to work alongside these 2 legends of the metal service center industry.

I'll start with our third quarter financial performance which again demonstrated the strength and resilience of our model. We achieved our highest third quarter sales of $4.25 billion which when combined with effective cost management, translated to earnings per share of $6.45 which was also a third quarter record. As Jim and Karla mentioned, healthy underlying demand for most of our products and services supported strong profitability during the third quarter. Our product diversity continues to benefit our operating results with limited exposure to hot-rolled coil which has experienced the most pricing volatility over the last 24 months. Total carbon flat rolled sales including cold rolled and galvanized which tend to follow HRC pricing, represented 17% of our sales dollars and 30% of our tons sold during the quarter. According to the Metals Service Center Institute, total carbon flat-rolled shipments in the third quarter of 2022 represented 68% of industry shipments.

Moving on to gross profit margins. Our non-GAAP gross profit margin declined 270 basis points from the second quarter as we work through higher cost inventory in a declining metal price environment, particularly for carbon and stainless flat-rolled products. To account for lower-than-anticipated metal costs, we reduced our annual LIFO expense estimate from $100 million to $30 million. And as a result, we recorded LIFO income of $27.5 million in the third quarter of 2022. Based on our revised full year estimate of $30 million of LIFO expense. Our current expectation for the fourth quarter of 2022 is $7.5 million of LIFO expense as we allocate our annual LIFO estimate on a pro rata basis to each reporting period. Consistent with our accounting policy, we will true-up to our actual LIFO calculation based on our on-hand inventory costs at the end of the year. As of September 30, 2022, the LIFO reserve on our balance sheet was $842.9 million which will be available to benefit future period operating results and mitigate the impact of any further decline in metal prices on our gross profit and earnings.

Moving on to expenses. Our third quarter non-GAAP SG&A expenses decreased $18.2 million or 2.8% compared to the second quarter of 2022 due to lower freight and fuel costs on reduced shipments and some slight moderation and inflationary pressures on those expenses along with lower incentive-based compensation resulting from lower profitability. On a year-over-year basis, our third quarter same-store non-GAAP SG&A expenses were relatively flat with an increase of only $2.3 million or 0.4% as lower incentive-based compensation from lower FIFO pretax profit offset inflationary factors, including higher wages, freight, fuel and plant supply costs. Pretax income for the quarter which totaled $524 million, declined by only 1.6% compared to the third quarter of 2021, despite a 230 basis point year-over-year decline in our gross profit margin.

We were able to offset the bulk of the decline in our gross profit margin via higher selling prices of 6.2% and higher tons sold of 3.5% which included contributions from our fourth quarter 2021 acquisitions. Our third quarter 2022 diluted earnings per share of $6.45, a record for the third quarter, were up about 5% from the third quarter of 2021 despite relatively flat pretax and net income levels due to a reduction in our outstanding common shares of about 6% during the past 12 months from our share repurchases.

We generated record quarterly cash flow from operations of $635.7 million during the quarter and we invested $95.5 million in capital expenditures and returned nearly $390 million to our stockholders through a $52.9 million of cash dividends and $336.7 million of stock repurchases at an average cost of approximately $178.79 per share. As a reminder, our Board of Directors replenished our repurchase authorization to $1 billion on July 26, 2022, reaffirming our collective confidence in our long-term strategy and outlook. Approximately $763 million remained available for repurchases under our $1 billion share repurchase authorization at September 30, 2022.

I'll now turn to our fourth quarter outlook. We expect healthy demand trends to continue into the fourth quarter despite prevailing macroeconomic uncertainty, along with other external factors such as inflation, ongoing supply chain disruptions and geopolitical matters. We do, however, expect shipment levels to be impacted by normal seasonal patterns, including fewer shipping days in the fourth quarter compared to the third quarter and our customers extended holiday shutdowns and vacation schedules. Accordingly, we estimate our tons sold will be down 6.5% to 8.5% in the fourth quarter of 2022 compared to the third quarter of 2022 or approximately flat to up 2% compared to the fourth quarter of 2021.

As Karla alluded to with regard to pricing, we expect continued declines for many of our products, notably for carbon stainless and aluminum flat rolled products to be offset by relatively stable pricing for certain higher-value products sold into the aerospace, energy and semiconductor end markets which continue to mitigate the overall decline in our average selling price per ton sold. As a result, we estimate our average selling price per ton sold in the fourth quarter of 2022 will be down 6% to 8% compared to the third quarter of 2022. We also expect continued pressure on our gross profit margin in the fourth quarter which we expect to be temporary as a result of selling higher cost inventory into a declining metal price environment.

Based on these expectations, we anticipate non-GAAP earnings per diluted share in the range of $4.30 to $4.50 for the fourth quarter of 2022. In closing, I'd like to reiterate that we are very pleased with our third quarter performance against the challenging backdrop of uncertain market dynamics. Nevertheless, our strong profitability and cash generation enabled us to continue making investments in the growth of our business while concurrently providing significant returns to our stockholders. Thank you to all of our Reliance colleagues for your contributions to these results.

This concludes our prepared remarks. Thank you for your attention. And at this time, we'd like to open the call up to questions. Operator?

[Operator]

[Operator Instructions] Our first question today is coming from Phil Gibbs of KeyBanc.

[Phil Gibbs, KeyBanc Capital Markets]

I wanted to, first of all, congratulate my Ohio friends and Jim and Karla. Congratulations to the both of you. Karla, obviously, for your promotion and Jim for your service and value creation. First question here is just on net working capital in the fourth quarter and what you're anticipating. Should we think that the release could be of equal size is, what you realized in the third quarter? Could it be a little better?

[Arthur Ajemyan, Senior Vice President & Chief Financial Officer]

Yes. Good question, Phil. And as we’ve said for working capital follows our volume and pricing guidance. So that a good way to think about it. Receivables are a lot more responsive to pricing changes than inventories, the inventory decline could be seasonal as well. So I think short answer is, take a look at our guidance, we’re pricing and volume for the fourth quarter and apply those to working capital levels and they should give you a good framework to come up with an estimate for working capital adjustments for the fourth quarter.

[Karla Lewis, President & Director]

Yes. And I would just add to that, Phil, in the third quarter, we did have a bit of a focus internally on bringing inventory levels down at a couple of our FOCs. Nothing significant. Our inventories have been in pretty good shape but at a few places, we were a little heavy. So there was probably a little extra cash flow generation in Q3 because of that focus.

[Phil Gibbs, KeyBanc Capital Markets]

Okay. And then, I know you did quite a flurry of acquisitions in the latter part of last year. What’s your appetite for M&A right now given what looks to be increasingly solid cash flow visibility for the next several quarters?

[Jim Hoffman, Chief Executive Officer]

Yes, good question. Our appetite is as strong as it's ever been. It's just a matter of finding the right company and finding companies that are for sale that we think will fit in our family of companies and we're still looking -- we're looking at a lot. There's a few out there, Phil, that are simply fishing, if you know what I'm talking about. They're just for sale to see if anybody is kind of crazy enough to spend what they want for them. So there's a few of those but the good news is there's plenty of really fine companies out there. And I can promise you we'll keep looking at them and we'll if a good one comes up and we can strike a deal, we'll do it. But as far as our appetite, it hasn't changed at all. And more important, we haven't lowered our bar. So that's still a major part of our growth strategy.

[Phil Gibbs, KeyBanc Capital Markets]

And then last question is just on your internal investments, the semis plant you have coming on, I believe, in Texas. Just remind us about what you have left to spend there when it ramps and maybe some also some color in terms of what you’re seeing in terms of demand in that silo.

[Karla Lewis, President & Director]

Yes. So I'll try to hit that for you. So we actually kind of have a 2-step expansion going on in Texas. The smaller plant where we'll be kind of welding bulk gas distribution systems for our customers. That we expect -- that's the smaller part of the expansion, that we expect to become operational first quarter of 2023. And then the more significant investment, well, we expect to be operational at the beginning of first quarter of 2024. There we'll be doing some electropolishing and cleaning of a lot of stainless steel tubing we sell into kind of the construction of the chip manufacturing plant. So our outlook there is good, the spend -- so most of that -- a small part will be in -- it actually could be even in the 2 years because construction is underway on the larger plant and we'll be starting to move into the smaller plant in the near future.

Big for us because the majority of our CapEx projects are maybe $1 million to $500,000 to $2 million. This one is a little larger. But we gave the expected total cash outlay of CapEx for this year of $300 million to $350 million. We were at $250 million year-to-date at the end of September. So that's all kind of factored into the cash expectation going forward. But semiconductor, we know there have been some announcements by some of the chip manufacturers and related businesses with layoffs and cutting production. But our folks the particular products they're selling and who they're selling into feel that semiconductor is going to be strong for the rest of the year and going into at least the first half of next year.

[Jim Hoffman, Chief Executive Officer]

And just one thing to add and I know you know this, Phil but that’s this big project we’ve undertaken, that’s just part of this whole reshoring thing and it’s legit. There’s a lot to it. And this one has been framed as a computer chip support spend. But it’s -- there’s a bigger picture there. This reshoring, near shoring, whatever they’re calling this week is real and we’re pumped up about it. It’s going to fit right in our wheelhouse and we’ll look forward to more.

[Operator]

[Operator Instructions] The next question is coming from Martin Englert of Seaport Research.

[Martin Englert, Seaport Research]

Can you talk a little bit maybe your thoughts on nonresidential construction and infrastructure moving through next year? Maybe what some of your customers are saying, anticipating, in particular, any exposure to intermediate fabricators and how their order books activity are looking?

[Karla Lewis, President & Director]

Yes. So I would say at a high level, Martin, we're still very positive on non-res construction. And remember -- and we put infrastructure in that as well. And remember that we're primarily participating in kind of the 4- to 5-story building and below. So we continue -- our customers continue to tell us they've got healthy backlogs going into 2023. So overall, we're positive based on what they're telling us and...

[Jim Hoffman, Chief Executive Officer]

And just one thing on the infrastructure bill. We've been talking about this for years and it's done nothing but gotten worse. I'm a little bit tired of seeing politicians having the press conferences on the end of a dilapidated bridge saying, as soon as we get this fixed, I'm going to walk across it. Well, that's interesting. It's time to start doing something about it. So it's going to come. It's going to come at one point, soon, I think. And we've been saying for years that Reliance is -- America is going to need Reliance to rebuild. And that's true and we stand ready and we'll look forward to politics to kind of get out of the way and for our real tax payments we've made over the years to go to work for American. So infrastructure is extremely important and when it comes, we're ready.

[Martin Englert, Seaport Research]

Okay. If I could one other on the reshoring, we’ve talked about some of the semiconductor activity but where else are you seeing it? What other, I guess, verticals or end markets? Are you seeing activity coming back state side?

[Jim Hoffman, Chief Executive Officer]

Well, the computer chips is the most obvious one. That's the one that's getting all the price. But you can hear it and you see it in automotive, appliance, those types of things. And remember, it's pretty -- it's kind of difficult for us because we have so many transactions and so many different companies that sell to so many different markets, they don't necessarily tell us where it's all going. But it feels like and looks like and what we've heard, these are -- this is work that's coming back. Certainly, nonresidential construction spend over the last several years lends itself to that. There’s manufacturing buildings being rebuilt and expanded. We’ve been expanding and expanding. Those are all, I think, telltale signs of reshoring and near-shoring. There’s some things going on in Mexico that we’ll continue to look at. There’s mills buying or spending money to increase capabilities. And that’s another sign of what may be coming our way. So nothing can really -- it’s hard for us to literally nail down where all these orders are going but we know it’s happening.

[Karla Lewis, President & Director]

Yes. I mean we do hear from the field, Martin. There are -- a lot of our customers are bringing certain components or different processes back and doing them in-house or doing them closer to their U.S. operations. They're not big public headlines when they're doing this but we're definitely in that it is real, as Jim was saying, in a lot of different areas. So we think that's good for us and good for the American economy.

[Martin Englert, Seaport Research]

If I could one last one on the labor dynamics, if you see any easing there that would maybe allow more activity to push forward moving through next year? And then along the same lines, there was backlogs of activity that had built moving past COVID, out of COVID there, how that’s looking, whether that’s kind of still sustaining and supporting some layer of demand out there?

[Jim Hoffman, Chief Executive Officer]

That's a great question. I think it's -- we just keep watching it. I can tell you from a Reliance standpoint, I think we've done a really fine job of retaining talent which is not easy to do. We've done a good job of attracting talent which is a whole different level of activity and we're paying attention to that. Our customers are having a tough go and that's hard to see. However, it kind of lends itself to our growth because if they can’t find the right people and they can’t spend the money they need to spend, we can and we do and we will and we have. So I’m not -- I don’t really know what next month is going to bring but we would love to have more folks and I know our customers love to have more folks. And it’s just a matter of recruiting the right people and convincing people that having a career in this industry is a good thing. So Karla, do you have anything to add to that?

[Karla Lewis, President & Director]

Yes. I mean I would say, Martin, it's we've been a little more successful, I think, in recruiting more people in the workforce over the last few months than we had seen prior to that. So we've seen some improvement there but I support all of Jim's comments. And the other thing, too, this is an issue that we're facing and others are facing. And we are looking to see how we can potentially automate more in our various operations. We're looking at technology that's out there. I can't tell you it's going to be a huge change in a year but we're certainly looking to invest more to help alleviate some of the pressure from the workforce now where it is more difficult to fill some of the positions in our industry and our customers' industry.

[Martin Englert, Seaport Research]

Congratulations on the solid results.

[Operator]

The next question is coming from Katja Jancic of BMO.

[Katja Jancic, BMO Capital Markets]

Could you talk a little bit about the outlook for CapEx for 2023. I know it’s early and I know some of the CapEx in 2022 is being pushed out because of supply chain issues but could you just provide some preliminary outlook directionally.

[Karla Lewis, President & Director]

So we are in the process of early parts of the process of putting together our 2023 capital expenditure budget. It's built from the ground up. Our folks out in the field identify opportunities by working with their customers. But we continue to see a lot of opportunity for us to continue to grow both by expanding facilities, greenfield facilities but also a lot of value-added processing equipment to do more for our customers. So I think it's going to be healthy. We don't have a number yet. We'll give you that in February. But we anticipate -- especially from a cash spend standpoint, probably consistent with this year. And hopefully, some of the supply chain issues will improve and we can catch up a little bit to maybe even have a slightly higher cash spend next year. But we'll have more information on that in February for you.

[Katja Jancic, BMO Capital Markets]

Okay. And maybe just one more on the value-added processing. Can you talk about how much of orders right now include value-added processing? And how do you see this going forward? Do you see any significant changes to that, especially when there’s a possibility that in a downturn, your customers might be focusing on cost savings?

[Jim Hoffman, Chief Executive Officer]

Well, I like what you said. I agree with that, that kind of answers the second part of your question. But just a little historical point. For a while, we were at about 40% of the orders we sold. We're up over 50% now. Where can it go from there, north, I'm not going to burden our next CEO with a number but my guess will be north of that because exactly what you said. I think our customers are going to need more work along those lines and we certainly are spending the money in the right ways and to agree with Karla about the automation. That's where we're spending our money. And I think in the future, that will just mean good things for Reliance and that will be a good thing for our customers as well.

[Operator]

At this time, I'd like to turn the floor back over to Mr. Hoffman for any additional or closing comments today.

[Jim Hoffman, Chief Executive Officer]

Yes. Thank you all for your time and attention today. Before we close out the call, I’d like to remind everyone that we’ll be in New York City in late November, presenting at the Goldman Sachs Global Metals and Mining Conference. And I’d like to thank my colleagues out in the field throughout the Reliance family of companies for their strong performance in the third quarter and thank you all for your contribution and support and your commitment to Reliance. Thank you.

[Operator]

Ladies and gentlemen, thank you for your participation and interest in Reliance. You may disconnect your lines and log off the webcast at this time and enjoy the rest of your day.