Q3 2022 Reliance Steel & Aluminum Co Earnings Call
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Greetings and welcome to the reliance steel and aluminum company third quarter 2022 earnings Conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If you would like to ask a question. Please press star one on your telephone keypad.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
It is now my pleasure to introduce your host Ms Kim or.
Can you. Please go ahead.
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'm joined by Jim Hoffman, CEO , Karla Lewis, President and Arthur a German senior Vice President and CFO .
Steve Cook 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 Day, Our S E C Dot 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.
Got it.
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 inherent I.
I will now turn the call over to Jim Hoffman CEO of reliance.
Thank you Jim 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 two weeks ago regarding our executive leadership succession plan after much personal deliberation.
I've decided to step down as CEO over reliance on December 31 of this year.
I am very pleased that Carla will succeed me as the.
Reliance Chief Executive Officer on January one 2023 at which time I will transition to the role of senior adviser to facilitate the trend vision of my responsibilities to Karla until my retirement in December of 2023.
We'll also retain marcy on the reliance board.
This announcement is the culmination of a deliberate long term strategic plan developed in conjunction with our board of directors.
I've had the good fortune and great privilege to work very closely with Carla for many years and I know that our customers suppliers and stockholders and colleagues will be in very good hands with her at the helm Carla.
Karl is a proven leader and executive and extremely and I am 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'm extremely grateful for the great opportunity and privilege drove then 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. Carla 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.
Yeah.
Turning to our third quarter results reliance has 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 four point to $5 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 environment in the third quarter, our diversification strategy benefit.
Our results doesn't recover in certain areas such as aerospace.
Energy and semiconductor helped moderate declines in our third quarter average selling price gross profit margins in 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.
Added stability to our gross profit margin despite declining metal prices.
Another key attribute of the reliance model is our strong cash flow generation.
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 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 on.
Going 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 were also pleased to returned 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 activities 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 business.
As we anticipate increased opportunities from an infrastructure bill and reassuring trends in the United States.
Thank you for your time and attention today I will now turn the call over to Carlos who will review, our third quarter operating results and demand trends Carla.
Thanks, Jen and good morning, everyone before I begin I would like to acknowledge Jim for his significant contributions to reliant.
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 environment and the global pandemic. Thank.
Thank you for your friendship and all the either done or 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 and 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.
Your study leadership focus on safety and commitment to customer service allowed us to once again outperform.
Our tons sold were down three 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.
This includes a decline in shipping volume 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 or and to a lesser extent robust semiconductor and aerospace shipments.
Similar to the last several quarters, we believe our third quarter shipment, but it's been even stronger had it not been for the persistence of labor shortages and other supply chain related disruption at our customers' facilities.
Our average selling price per ton sold of $3039 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 had 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.
We believe we may see some continued pricing decline that was more moderate levels.
It's important to highlight that current pricing for most of the products. We sell remains at historic high.
As we have experienced in prior cycles declining pricing levels led to temporary compression in our gross profit margin during the third quarter up 20, 22% to 29.2%.
On a non-GAAP FIFO basis, which is how we monitor our day to day operating performance.
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.
Instead of reliance aside 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're 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 10 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 that said, our broader manufacturing sector improved compared to the third quarter.
<unk> 2021 with underlying manufacturing demand remaining at healthy levels.
Semi conductor 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.
And in the military defense and space portions of our aerospace business remains strong with a healthy backlog.
Only demand in the energy sector experienced normal seasonality compared to the second quarter 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 times in the past to continue reliance is solid operating performance in the coming quarters. We appreciate the contributions made by each of our 15000 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.
Thanks, Karla good morning, everyone and thank you for joining us today.
First I'd like to congratulate both Jim and Carla and they're well on career transition. It remains my great privilege to work alongside these two legend 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 four point to $5 billion, which when combined with effective cost management.
Leading to earnings per share of $6.45.
There's also a third quarter record.
As Jim and Carla 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 a hot rolled coil, which has experienced the most pricing volatility over the last 24 months.
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 ACOG.
According to the Metals Service Center Institute.
Total carbon flat rolled shipments in the third quarter of 2022 represented 68%.
Industry shipments.
Moving onto gross profit margins are.
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.
It's still early for carbon and stainless flat rolled products.
To account for lower than anticipated metal cost.
Do our annual LIFO expense estimate from $100 million $30 million.
And as a result, we recorded LIFO income of 27, and a half million dollars 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 seven.
Seven and a half a million dollars of LIFO expense.
Looking at 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.
Just on our on hand inventory cost at the end of the year.
As of September 32022, 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.
Earnings.
Moving onto expenses.
Our third quarter, non-GAAP , SG&A expenses decreased $18 $2 million or two 8%.
Compared to the second quarter of 2022, due to a lower freight and fuel costs and 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 24% as lower incentive based compensation from lower FIFO pretax profit offset inflationary factors into.
Putting higher wages.
Great fuel and planned supply costs.
Pretax income for the quarter, which totaled $524 million.
Declined by only one 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.
Higher selling prices of six 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 third quarter, we're up about 5% from the third quarter of 2021, despite relatively flat pre tax 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.
Yeah.
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 repurchase under our $1 billion share repurchase authorization at September 32022.
I'll now turn to our fourth quarter outlook.
We expect healthy demand trends to continue into the fourth quarter.
Prevailing macroeconomic uncertainty along with other external factors such as inflation ongoing supply chain describe disruptions and geopolitical matters we.
We do however, expect shipment levels to be impacted by normal seasonal patterns.
Excluding 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 six and a half to eight 5% in the fourth quarter of 2022.
Prior to the third quarter of 2022.
Were 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 product, notably for carbon and stainless and aluminum flat rolled product.
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 at concur.
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.
Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time all confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your hand.
Check before pressing the star keys once again that is star one to register your questions. At this time. Our first question today is coming from Phil Gibbs of Keybanc. Please go ahead.
Thank you good morning.
Hey, Phil.
Wanted to first of all congratulate my Ohio friends, and Jim and Carla.
Congratulations to the both of you.
Carlos obviously for your promotion and Jim for your your service and value creation.
So that's it.
Our first question here is just on on net working capital in the fourth quarter and and what what you're anticipating should we think that the the release could be of equal sizes, what you realized in the third quarter or could it be a little better.
Yeah. Good question, Phil and as we've said before working capital follows our volume and pricing guidance. So that's a good way to think about it you know receivables are a lot more responsive to pricing changes in inventory.
Yeah, the inventory di decline could be you know seasonal as well so I think you know.
Short answer is you 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, Yeah, 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 R. R. F. O sees them you know nothing significant or our inventories have been in pretty good shape that in a few places we were a little heavy so there was probably a little extra cash flow generation in Q3 because of that focus.
Yeah.
Okay.
And then I know you you did quite quite a flurry of acquisitions now in the latter part of.
Well last year.
What's your appetite for M&A right now given what looks to be increasingly a solid cash flow visibility for the next several quarters.
Yeah. Good question, our appetite is strong as its ever been.
A matter of finding the right company.
Fun companies who've ever for sale of recyclables.
Our family of companies and we're still looking.
We're looking at a lot of there's.
Theres a few out there feel that are.
Simply fishing, if you know what I'm talking about there just for say all of them see if anybody's got.
Crazy enough to spend what they want for them. So there's a few of those but the good news is there's a there's plenty of really fine companies out there and.
I can promise you, we'll keep looking at them and we will.
Good when it comes up and we can strike a deal we'll do it but as far as our appetite hasnt changed at all and more important we have a lower bar. So it's a it's still a major part of our our growth structure.
And then the last question.
Just on your your internal investments.
The Sami's plant you have coming on I believe in Texas, just remind us.
What you are what you have left to spend there when it ramps and.
You know maybe maybe some also some also some color in terms of what you're seeing in terms of demand in that silo. Thank you.
Yeah, So I'll I'll try to hit that for you. So we actually kind of have a two step expansion going on in Texas.
Smaller plant, where will be you know 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 the first quarter of 2024, and there will be doing some electric polishing and cleaning of our largest stainless steel tubing, we sell into them kind of the construction of the shipment.
Any factoring plant. So our outlook. There is good you know spend mm yeah. So most of that a small part will be in 'twenty actually it could be even in the two years, because construction's underway on the larger plant.
And we'll be starting to move into the smaller plants are in the near future.
You know big for us because the majority of our Capex projects or you know maybe a million too.
500000 to $2 million this one's 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.
Expectations going forward, but semiconductor we know there've been some on.
You know announcements by some of the chip manufacturers and related businesses with layoffs and cutting production, but you know our folks.
The particular products they are selling and who they are selling into feel that semi conductor is gonna be strong for the rest of the year and going into a at least the first half of next year.
Just one thing to add I know you noted the skull.
This would project we've undertaken.
That's just part of this whole reassuring thing and it's legit.
There's a lot to it.
This one has been framed as a oh.
It was a computer chip.
Support.
Spend but it's.
There's a bigger picture there this re shoring near shoring or whatever they're calling this week is real.
We're pumped up about it it's going to it's going to fit right in our wheelhouse and.
We'll look forward to more.
Thanks, so much.
Thanks, Phil.
Once again, ladies and gentlemen that is star one to register any questions. At this time, we will pause a moment to give parties the opportunity to ask a question.
Thank you. The next question is coming from Martin Englert of Seaport Research. Please go ahead.
Hi, good morning, everyone.
Martin one anymore.
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 fabricate intermediate fabricators and how their order books activity are looking.
Yeah.
So I'd say at a high level of Martin.
We're still very positive on non res construction and.
Remember and we put infrastructure in that as well and you know remember that were primarily participating in kind of a four to five storey building in below. So we continued as our customers continue to tell us they've got healthy backlogs going into 2023. So.
Overall, where we're positive based on what they're telling us.
And just one thing on the infrastructure Bill.
Been talking about this for years and Thats.
It's done nothing but got gotten worse me personally I'm, a little tired of seeing politicians oven press conferences Lana.
On the end of a duopoly data bridge thing as soon as we get this fixed I'm going to walk across as well that's an interesting one.
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.
You know reliance is.
America is going to need reliance to rebuild.
That's true and we stand ready and we'll look forward to.
Politics to kind of get all the way in our for our rural.
<unk> payments, we've made over the years to go to work for for Americans. So.
Infrastructure is extremely important when it comes we're ready.
Okay. Thank you for that if I could one other on the re shoring you know 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 stateside.
Okay.
Well there was a.
The computer just most obvious one that's the one that's getting all the press but.
Couldn't hear it you'd be to hear it and you'll see in automotive appliance those types of things.
Remember, it's pretty it's kind of difficult for us because we have so many transactions in so many different companies that sell to so many different markets.
They don't necessarily tell us where it's all ongoing.
But it feels like and looks like and what we've heard. These are this is work that's coming back.
Certainly nonresidential construction.
Construction.
Spend over the last several years.
Lends itself to that.
Manufacturing buildings being rebuilt and expanded heck works, where we've been expanding and expanding those are all I have.
Think telltale signs of a re shoring and near shoring, there's some things going on in Mexico that will continue to look at.
Theres mills buying or spending money to increase our capabilities and.
That's another sign of of.
Oh, what may be coming our way so nothing Kimberly it's hard for us to.
Literally.
No nail down where all these orders are going but.
We we know what we know of traveling.
Yeah, I mean, we did hear from the field Martin there a lot of our customers are bringing you know certain components or different processes.
Back and doing them in house or doing them closer.
Their U S operation, they're not big you know public.
Headlines when they're doing it but we're definitely seeing that it is real as Jim was saying.
A lot of different areas. So we think that's good for us and good for US for you know the American.
Can economy.
If I could one last one on the labor dynamics, if you see any easing there that would maybe.
Got some more activity to push forward moving through next year and then along the same lines you know there was.
Backlogs of activity that had built up.
Past COVID-19 out of Covid, there, how that's looking whether that's kind of still sustaining and supporting some layer of demand out there.
That's great question I think it's just we just keep watching it I can tell you from our relaunch 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 we're paying we're paying attention to that.
Our customers are having a tough go.
And that's that's hard to see however.
Kinda linzer lends itself to our growth.
If they can't find.
The right people and they can't.
You know spend the money they need to spend we can and we do and we will and we have so I'm I'm not I don't really know what next month is going to bring but we would love to have more folks on iron ore customers loved more folks and it's just a matter of a recruit.
Putting the right people in.
Convincing people that I'm, having a career in this industry is a good thing. So Charlie do you have anything to add to that or yeah. I mean, I would say Martin. It's it's we've been a little more successful I think in recruiting folks more people in the workforce over the last few months.
And then we had seen.
Prior to that so we've seen you know some in improvement there.
They support all of Jim's comments and the other thing too you know this is 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.
Yeah, we're looking at technology, that's out there I can't tell you, it's gonna be a huge change in a year, but we're certainly looking to to invest more to help alleviate some of the pressure from you know that the workforce now where it is more difficult to to fill some of the positions in our industry.
Our customers industry.
Okay. Thank you very much for all the insights and color there and congratulations on the solid results.
Great. Thanks, a lot.
Thank you. The next question is coming from Carter, Yes, John Kim of BMO. Please go ahead.
Hi, Thank you for taking my questions.
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.
Yeah, Hi, Katja.
So we are in the process of early parts of the process of putting together our 2023 capital expenditure budget. You know, 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.
<unk> for us to continue to grow both by expanding the facilities Greenfield facilities, but also a lot of value added processing equipment to do more for our customers. So you know I think it's gonna be healthy we don't have a number yet we'll give you that instead.
I'd be wary, but you know, we anticipate especially from a cash spend standpoint.
Consistent with this year and hopefully some of the the supply chain issues will improve and we can catch up a little bit maybe even have a slightly higher cash spend next year, but well have more information on that in February for you.
Okay.
Just one more on the value added processing can you talk about how much of orders right. Now include Boston and how do you see those going forward do you see any significant changes should that especially when.
There is a possibility that you know in a downturn your customers might be focusing on cost savings. Thank you.
Well our language just said I agree with that kind of answers the second part of your question, but.
Just a little historical.
Well point for a while we were at about 40% of the.
Orders, we are sold were up over 50% now.
Where can it go from there north.
Not going to burden our next CEO with a number but my guess would be north of that but goes exactly what you said I think our customers youre going to need more.
Work, along those lines and we certainly are spending the money in the right ways into them too.
To.
To agree with Carl about the automation, that's where we're spending our money and I think in.
In the future that will just I mean, good things for reliance.
Hmm.
And that'll that'll.
That'll be a good thing for our customers as well.
Did you have any additional questions or comments.
No. Thank you.
Thank you at this time I'd like to turn the floor back over to Mr. Hoffman for any additional or closing comments today.
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 reliance family of companies for their strong performance in the third quarter.
And thank you all for your contribution and support.
To reliance thank you.
Ladies and gentlemen, thank you for your participation and interest in reliance you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.
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