© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Greetings, and welcome to the Reliance Steel & Aluminum Company Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Kim Orlando with ADDO Investor Relations. Thank you. You may begin.
Thank you, operator. Good morning and thanks to all of you for joining our conference call to discuss Reliance’s second quarter 2022 financial results. I’m joined by Jim Hoffman, CEO; Karla Lewis, President; and Arthur Ajemyan, Senior Vice President and CFO. 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, CEO of Reliance.
Thanks Kim. Good morning, everyone. And thank you for joining us today to discuss our second quarter 2022 financial results. I will begin with an overview of our performance and capital allocation activities. Karla will then speak to our operating results and demand trends by end market. And Arthur will conclude with a review of our financials.
Reliance delivered an exceptional second quarter with record setting financial performance and outstanding operational execution. We achieved all-time high quarterly net sales of $4.68 billion, which combined with an enhanced gross profit margin of 31.9% and continued strong operational leverage resulted in record quarterly earnings per share of $9.15 cents as well as significant cash flow to fuel our growth and stockholder return priorities.
These results were supported by ongoing healthy demand in most of the end markets we serve and continued elevated pricing levels for the majority of the products we sell. Our earnings for the first half 2022 of $17.49 per share were near the record annual earnings per share of $21.97 we attained in 2021 and we are on pace to achieve another year of record profitability.
Our model continues to prove resilient amidst challenging macroeconomic circumstances bolstered by our diverse array of products, end markets, geographies, as well as consistent support of our domestic suppliers to secure ample inventory for our customers. Our commitment to customer service has solidified our position as a partner of choice. With our deep rooted relationships driving approximately 97% of our orders from repeat customers and 50% of our orders, including value added processing. Our broad geographic footprint of approximately 315 service centers strategically located in close proximity to our end customers provides us a unique competitive advantage by enabling quick turnaround with approximately 40% of our orders delivered within 24 hours.
In addition, our proprietary fleet of over 1,700 trucks mitigates the impact of increased transportation cost in the current inflationary environment. Continued improvement in our strong gross profit margin combined with our record setting quarterly sales produced record gross profit of $1.50 billion. Our managers in the field once again did a tremendous job of appropriately pricing the value we provided to our customers. Even as we solve pricing, begin to decline for many of our products in the latter parts of the second quarter.
Looking ahead, as we begin to navigate an environment with overall declining metals pricing, the core tenants of our model, including our value-added processing capabilities, product, end markets and geographic diversity and smaller order sizes with quick turnaround supported by our proprietary fleet of trucks will collectively help provide a stabilizing effect in our selling prices and margins.
Our customers also tend to hold less inventory in times of declining prices and increase their reliance on us to provide the metal they need quickly and more frequently, as well as to fulfill their value-added processing needs. Our record second quarter earnings helped us generate strong cash flow from operations of $270.2 million fueling our strategic priorities of growth and stockholder returns.
We continue to see numerous organic growth and acquisition opportunities. The majority of our capital expenditures in 2022 target expansion in growing end markets, most notably the semiconductor industry. Through additional restoring opportunities come to fruition, we continue to believe our strong cash flow generation positions us well to support enhanced growth in the semiconductor space, as well as other end markets.
While our full year capital expenditure budget is $455 million, we believe our cash outlays in 2022 will be in the $300 million to $350 million range given extended lead times throughout the supply chain. On the M&A front, the pipeline remains strong and we continue to evaluate potential targets on a regular basis applying our strengthened criteria.
Turning to stockholder returns. We have returned over $2.3 billion in capital to our valued stockholders since 2017, through regular quarterly cash dividends and share repurchases. We have paid regular quarterly cash dividends for 63 consecutive years without reduction or suspension and have increased our quarterly dividend 29 times since our 1994 IPO. Arthur will elaborate on our stockholder return activity shortly.
Before I conclude, I’d like to take a moment to recognize some well deserved promotion, as well as the retirement of Mike Shanley as Senior Vice President of Operations following his 44 years of service to Reliance. Mike transitioned to the role of special advisor at the beginning of July to facilitate the transition of his responsibilities and to support other special projects in advance of his retirement by the end of the year. On behalf of the entire Reliance team, I’d like to thank Mike for his tremendous efforts, including his strong leadership skills and dedication to growth, innovation and customer service, which have been integral to our success.
We wish him all the best in his upcoming retirement. I’d also like to congratulate Steve Koch and Mike Hynes on their promotions. Consistent with our board strategic executive leadership succession plan, Steve was promoted from Senior Vice President of Operations to Executive Vice President and Chief Operating Officer effective July 1, 2022. Steve’s industry knowledge, passion for operational execution, exemplary leadership skills has earned him the respect of his colleagues throughout the Reliance family of companies, as well as our key domestic suppliers. In his new role, Steve will oversee operations throughout our company with an emphasis on safety and organic growth.
Mike Hynes was promoted from President of the Phoenix Metals, a Reliance subsidiary to Senior Vice President of Operations effective July 1, 2022. In his new role, Mike will oversee the performance of a number of Reliance’s operations, as well as providing strategic direction and general management guidance drawing on his wealth of industry and product knowledge earned in his 34 years in the industry. I look forward to continue to work closely with both Steve and Mike in their new roles.
In summary, our relentless focus on operational execution produced another quarter of record financial performances. Looking ahead, we will continue to execute our model as we always have and maintain our focus on continuous improvement despite macroeconomic challenges, including inflation, recessionary concerns, and labor and supply related pressures. We’re committed to our by domestic philosophy and longstanding supplier relationships, which have supported our ability to uphold superior service standards by ensuring access to metal we need to support our customers’ needs.
Finally, I’d like to reiterate that Reliance remains well positioned to navigate challenging environment as we have done so successfully in the past. And we are prepared to help America rebuild as ever increasing infrastructure needs persist.
Thank you for your time and attention today, I will now turn the call over to Karla, who will review our second quarter operating results and demand trends.
Thanks, Jim, and good morning, everyone. Before I begin, I’d like to acknowledge the outstanding efforts of my colleagues throughout the Reliance family of companies that led to another record setting quarter. Our performance would not have been possible without your unwavering commitment and dedication to safety and operational excellence. Our safety performance improved in the quarter. Thanks to your re-energized focus while continuing to manage through COVID and other labor disruptions. Thank you.
I’d also like to congratulate both Steve Koch and Mike Hynes on their well deserved promotions and thank Mike Shanley for all of his contributions over the years. Now, I’ll turn to our second quarter operational performance. Our tons sold were up 2.7% over the first quarter, surpassing our guidance range of flat to up 2%.
As Jim highlighted, strength in underlying demand remained healthy throughout Q2 and our shipments increased quarter-over-quarter. We believe our first quarter shipments were somewhat held back by COVID issues in the beginning of the quarter, and then increased significantly in March when the Ukraine crisis spurred a bit of panic in the industry with prices for many metals spiking and customers buying heavier volumes. Shipments during the second quarter leveled off at healthy levels and we believe could have been stronger if not for labor shortages and other supply chain disruptions.
Given the elevated pricing levels at the beginning of the second quarter that moderated for many products in the latter part of the quarter, our average selling price was a record $3,240 per ton sold. This reflects a 1.7% increase in our average selling price compared to the first quarter of 2022, and was at the high end of our outlook a flat to up 2%. Prices for the majority of our products peaked in May and began to decline in June.
As Jim noted, record sales supported by healthy demand and elevated pricing levels contributed to record quarterly gross profit dollars in the second quarter of 2022 and a strong gross profit margin of 31.9%. On a non-GAAP FIFO basis, which is how we monitor our day to day operating performance, our gross profit margin was 32.2%, up 30 basis points from the prior quarter.
I’ll now turn to a high level overview of our key end market trends. Demand for non-residential construction, which includes infrastructure, it is the largest end market we serve improved steadily over the first quarter with notable strength in June. Demand for the toll processing services Reliance provides to the automotive market remains steady during the second quarter, despite ongoing supply chain challenges, including the continuing impact of the global microchip shortage on new vehicle production levels.
We saw a demand decline compared to the first quarter across the broader manufacturing sectors we serve, including industrial machinery and consumer products. Nevertheless, our shipments related to industrial machinery still trended above that of the second quarter of 2021 and remain at healthy levels. Underlying demand in heavy industry was mixed in the second quarter with construction equipment continuing to improve at a healthy rate. Semiconductor demand remained robust during the second quarter and continues to be one of our strongest end markets. As Jim highlighted, we’re continuing to make substantial investments in this space in order to capitalize on the semiconductor fabrication expansion underway in the United States.
Commercial aerospace demand continued to recover with our shipments improving year-over-year for the second 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 solid with strong backlogs.
Finally, demand in the energy sector, which we define as mainly oil and natural gas continue to improve with shipments increasing over both the previous quarter and prior year quarter. We remain cautiously optimistic demand trends in the third quarter will remain healthy across most of the end markets we serve. Despite declining pricing trends for many of our products, general market conditions remain supportive of elevated pricing compared to historical levels for the majority of our products into the third quarter of 2022. We are confident our managers in the field will successfully navigate these pricing headwinds as they have done many times in the past and continue to deliver solid operating performance, while keeping our colleagues and our communities safe and healthy.
I will now turn the call over to Arthur to review our financial results, to provide more details on our demand and pricing outlook for the third quarter. Arthur?
Thanks, Karla. Good morning, everyone and thank you for joining us today. We set new records for our financial performance during the second quarter from our record quarterly top line net sales of $4.68 billion to our bottom line earnings per share of $9.15. As Jim and Karla mentioned positive demand and pricing conditions supported our record financial results during the second quarter. While we are seeing declining pricing trends for many of our product into the third quarter, we believe our unique model, specifically the rich diversity of our product, end market and geographies along with strong pricing discipline and operating leverage will help mitigate the impact to our bottom line. More on our third quarter outlook later.
Turning to margins. Our non-GAAP gross profit margin trended up 80 basis points from the first quarter supported by higher selling prices and lower LIFO expense. In June, we began to experience declining metal cost trends and selling prices for many of the products we sell, which resulted in a reduction of our annual LIFO expense estimate from $150 million to $100 million.
Consistent with our accounting policy, we allocate our annual LIFO estimate on a pro rata basis each reporting period, which resulted in LIFO expense of $12.5 million in the second quarter, the true up to our new annual estimate through June 30, 2022. Based on our revised estimate, our current projection for LIFO expense in the third quarter of 2022 is $25 million. As in prior years, we will revise our expectations each quarter based on our inventory costs and metal pricing trends.
As of June 30, 2022, the LIFO reserve on our balance sheet was $870.4 million, which will be available to benefit future period operating results and mitigate the impact of potential declines in metal prices on our gross profit and pretax income.
Moving on to expenses. Our second quarter non-GAAP SG&A expenses increased $35.5 million or 5.8% compared to the first quarter of 2022 due to higher than anticipated inflationary pressures for fuel, freight and packaging costs along with higher incentive based compensation associated with a 9.4% increase in pretax profits.
We believe our total transportation costs, which collectively make up approximately 18% to 20% of our total SG&A costs would’ve increased at a much higher rate had we been more reliant on third-party carriers. On a year-over-year basis our second quarter same-store non-GAAP SG&A expenses increased $63.2 million or 11.2% mainly due to the same inflationary factors, including higher wages, as well as incentive-based compensation due to significantly higher levels of gross profit and pretax income.
We generated record pretax income, record earnings and strong cash flow from operations totaling $270.2 million. Despite these prevailing headwinds and more than $400 million increase in working capital driven by higher inventory costs on hand, as well as higher estimated income tax payments.
During the quarter, we invested $87.5 million into the company through capital expenditures and returned nearly $250 million to our stockholders through $53.9 million of cash dividends and $193.9 million of share repurchases at an average cost of approximately $179 per share. Our repurchases in the period from July 1 through July 26 were an additional $100 million at an average cost of approximately $172 per share. Bringing our total repurchases to $598.4 million at an average cost of approximately $164 per share under our 1 billion share repurchase authorization in July, 2021.
As announced earlier today in our earnings release, our Board of Directors approved an amendment to our share repurchase plan, replenishing our repurchase authorization to $1 billion, reaffirming our collective confidence in our long-term strategy and outlook.
I’ll now turn to our third quarter outlook. We remain cautiously optimistic about business conditions in the third quarter of 2022. Although, the effective inflation, ongoing supply chain disruptions and geopolitical matters provoke general macroeconomic uncertainty, we expect solid underlying demand trends to continue in the vast majority of the markets we serve.
However, we expect shipment levels to be impacted by normal seasonal patterns, including a decline in shipping volumes due to planned customer shutdowns and vacation schedules. Accordingly, we estimate our tons sold will be down 3% to 5% in the third quarter of 2022 compared to the second quarter of 2022. Further, we expect declines in pricing for many of our products, notably for carbon, stainless and aluminum flat-rolled product.
Now withstanding these challenges, we expect improving demand and pricing for certain higher value product sold into the aerospace, energy and semiconductor end markets will partially mitigate the overall decline in our average selling price per tons sold. As a result, we estimate our average selling price per ton sold in the third quarter of 2022 will be down 5% to 7% compared to the second quarter of 2022.
We also expect our gross profit margin in the third quarter to temporarily trend down from second quarter level as we work through higher cost inventory in a declining metal price environment. Based on these expectations, we currently anticipate non-GAAP earnings per diluted share in the range of $6 to $6.20 for the third quarter of 2022. As a frame of reference to date, our best ever third quarter results were attained in the third quarter of 2021 with $6.15 of earnings for deed share.
In closing, we were very pleased with our record financial and operational performance in the second quarter. And we would like to once again, thank all of our Reliance colleagues for their contributions to these exceptional results.
That concludes our prepared remarks. Thank you for your attention. And at this time we’d like to open the call up to question. Operator?
Thank you. [Operator Instructions] Our first question comes from the line of Emily Chieng with Goldman Sachs. Please proceed with your question.
Good morning, Jim, Karla and Arthur. And thank you for the update today. My first question is just around getting perhaps some additional color around the non-residential construction and market there. Perhaps are you able to share what sub-sectors within that or what sort of components are seeing more of the strength versus others where maybe activity levels could be plateauing? How are activity levels trending currently in July from that strength that you noted in June as well?
Yes. Hi, Emily. Good morning. So for the non-res sector, as we commented on, our shipments were very healthy at good levels during the second quarter. But in particular in June we saw increased activity in bookings. We do service many different types of projects. If you recall, we typically are on projects that are like four to five story buildings or lower. We continue to see strength in like data centers, schools, hospitals, there’s airport work going on. So just a lot of various types of structures.
And we had seen the Northeast and the East Coast had been a little stronger in the first quarter with the West Coast lagging a bit, but we saw the West Coast also start to pick up a bit more in the second quarter compared to the first quarter. So again, smaller projects with a variety of different types of projects in there.
Great. That’s really helpful color. I appreciate the color there. And then maybe my second question is just around realized pricing expectations for 3Q and I appreciate that. Part of that it is product mix shift as some of the higher value products start to see some demand strengths. But is there any sort of color you could provide as to what some of the price differentials could look like just to help us paint a picture of what that could go – look like on a go forward basis as well?
Yes. And I think Emily, again, our product breadth is so diverse, which is part of the strategy and the design. So it’s a little difficult to comment on. But I think a lot of times as much as we try to remind people, we have a limited exposure to carbon flat-rolled, especially hot-rolled coil, which is where you saw the most kind of price destruction during the quarter with prices falling back down to where they had been prior to the Russ-Ukraine crisis. And so we have limited exposure to that. So I think our Q2 price held up better than maybe a lot of people expected. A lot of the other carbon steel products, maintained pricing levels or came down a bit. There were some downward revisions in scrap, but not all the carbon products follow that.
We think partly because we do have healthy demand out there. There was a decrease again today for carbon steel plate, which we’ve got decent exposure to. But overall the pricing levels are – we think still good compared to historical standards. Within aluminum we’ve got some common alloy exposure where we’ve seen prices trend down. But we also on the heat treat aerospace products, there’s continued strength in those prices.
Also, on the stainless side, again, we’ve seen some decline, but not too significant at this point. So we think pricing levels are still good. But do anticipate that they could soften a bit next quarter. But we think a lot of the price correction has already occurred for most of the products that we carry.
Great. Thank you.
Thank you. Our next question comes from the line a Seth Rosenfeld with BNP Paribas. Please proceed your question.
Good morning. Thanks for taking our questions today. First is going to be a follow-up to Emily’s question on the product mix, in fact, on ASP. When you think about aerospace, energy and semis, can you just remind us kind of what portion of mix those three segments currently represent? And how that compares to past up cycles? The words to continuation of these demand trends, how much further could that run? That’s still a benefit to mix say into 2023.
Yes. Hi, Seth. So, aerospace and energy in kind of prior normal to strong cycles for them had represented about 10% of our sales dollars. But if you recall in early 2020, we did some restructuring to our energy businesses. And so energy now is typically about 3% to 4% of our total sales dollars. And then aerospace, like I said, had generally been closer to 10%. That’s come down kind of in the 6% to 8% range now. But as we continue to recover that could trend up again, especially it’s hard to sales dollars and with carbon steel prices being much higher than they had been historically that shifted a little more of our sales dollars into some of those products and away from energy and aerospace.
Semiconductor, we’re not sure exactly what that percent is, but probably, somewhere in between energy and aerospace currently. Yes, and we see those three markets continuing to recover. We talked about through the third quarter, we didn’t give a lot more guidance beyond that, except that aerospace, we think based on build rates by the airplane manufacturers, if those hold that we’ll continue to see recovery through 2023 as well.
Perfect. Thank you very much. And the second question, please, with regard to cost inflation. Can you give us a quick reminder of the cost elements between logistics, labor, and energy by how much have you seen those increase year-over-year and in your prepared remarks, you touched on some of the mitigating factors for logistics of trucking, but can you walk through any other mitigating factors to be aware of for labor and energy as well, please?
Yes, hi, Seth. This is Arthur. Good question. So we commented on our sequential SG&A increase. It was about $35 million that it went up sequentially. And about a third of that was inflationary, I would say, due to title transportation costs higher, we had record high levels of fuel prices and partly, and then we say that that impact was somewhat mitigated by our own fleet of trucks where we’re not necessarily exposed as much to increased transportation costs. So yes, I mean, when you look at our own fleet and the rental costs that we pay for our trucks and trailers, the wages for our drivers, et cetera, those don’t necessarily move up with inflationary factors, just general, freight, right.
So that kind of mitigates the impact of higher transportation costs on our P&L. And just to give you an idea about 18% to 20% of our total SG&A costs, our transportation related and a good chunk of that little over half is our own internal fleet cost. So I hope that gives you some color.
That’s great. Maybe any other comments on just general wage inflation, you’re saying not just on the transport side, but within your warehouses and processing centers as well.
Yes. Hi, Seth. It’s Karla. So at Reliance, we give annual increases. We’ve done that consistently over the years, typically our increases were about 3% a year in a normal year. This year, they were up a bit more in kind of a 4% to 5% range. So I mean, certainly there are some crazy numbers being talked about out there, but overall we boosted the wages a bit, but nothing too significant.
Yes. For us…
Thank you very much.
Yes. It’s been mainly incentive based compensation driving the increase in SG&A, that’s tied to record profitability levels.
Great. Thank you so much.
Thank you. [Operator Instructions] Our next question comes from line of Timna Tanners with Wolfe Research. Please proceed with your question.
Hey, good morning guys. Hope you’re doing well.
Hey, Timna.
Hello. Wanted to follow up on the pricing question, just to clarify. So when you talk about the change in your LIFO outlook and the 5% to 7% decline in average selling prices, is that a snapshot of what you’re seeing today, because you also said that you think a lot of the price correction is already occurred. So the quarter of a quarter is more to reflect the exit Q2 or what you’re seeing today in July?
Yes. It’s kind of a combination, Timna. So as we said, we do think that we could see some more decreases on some of the products, but not to the extent that we saw the corrections in the second quarter.
Yes. And when it comes to LIFO, Timna, as you know, there’s a lag there, right. For current prices to be reflected in your inventory costs that takes about a full turn. So let’s say three months at a minimum, right to the three months. So LIFO going in a way is a bit tricky because you kind of have to focus on what costs are going to be on hand at the end of the year and not so much your selling prices. So, I mean, when we’re guiding to declining prices in a quarter and have LIFO expense, we certainly understand that create some confusion, but that’s just part of the accounting convention where you’re booking your annual estimate on a pro rata basis, but LIFO will make much more sense on an annual basis when you have your actual LIFO income for a year. And then it’ll basically adjust for pricing, inventory gains, losses, so to speak on an annual basis.
No, I got that, what I was trying to figure out. So if it’s an annualized assumption of a $100 million versus $150 million, is that a snapshot based on June – end of June of the quarter, or is that a snapshot that’s already, including also your assumption into Q3? Like could it actually shrink further as the year progresses given assuming prices continue to slip a bit?
No, we look at the forward curve where prices are headed and then look at our cost and where the forward curve is, and estimate as best as we can where we think our costs will end up at the end of the year.
Got it. Okay. Thank you. And then my other question was really about working capital on how to think about that unwind. We’ve talked over the years about the advantage in the falling price environment of in the past, at least pretty big working capital unwind. So obviously raises the question of how you see that cadence and then any updated thoughts on uses of cash, M&A attractiveness, et cetera.
Yes. So working capital, Timna, I think, you saw Q3 inventories came in a little higher than expected. Some of that is just a factor of overall kind of supply chain and mills catching up. But I think on the Q3 guidance, it’s just typical seasonality. So really in terms of trending working capital, it should sort of trend with historical seasonal patterns. I mean, when you have pricing decline, your receivables, et cetera, trend down and basically level off to current price levels, but nothing out of the ordinary in terms of substantial working capital releases outside of seasonal patterns.
Yes. Hey Timna, this is Jim. Yes, about M&A, we continue to do what we’ve always done. There’s a target rich environment out there, really fine companies. And we will continue to look at those. And we find a good one we will buy them. So that, if you’re asking how that is looking right now, it really doesn’t change much for Reliance. We buy good companies and there’s plenty of them out there.
And on cash use, we think we continued to buy good companies during the quarter with our share repurchases of buying back our Reliance stock. So you saw a little increased activity in that for the quarter. So we were glad to be able to take advantage of that.
Okay, great. Thanks everyone.
Thank you.
Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Mr. Hoffman for any final comments.
Yes. Thank you. Thanks again to all of you for your time and attention today. Before we close out the call, I’d like to sincerely thank all of my colleagues throughout the Reliance family of companies for their fantastic second quarter performance, which led to record financial results. You all continue to inspire me through your commitments to superior customer service, operational excellence, including preserving our highest core value of safety in the workplace. Thank you all for your continued support of end commitment to Reliance.
Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.