Greetings, and welcome to the Reliance Steel & Aluminum Company Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer 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 Ms. Brenda Miyamoto, Investor Relations for Reliance. Thank you, Ms. Miyamoto. You may now begin.

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss our second quarter 2015 financial results. I’m joined by Gregg Mollins, our President and CEO; Karla Lewis, our Senior Executive Vice President and CFO; and Executive Vice President of Operations, Jim Hoffman and Bill Sales; David Hannah, our Executive Chairman will also be available during the question-and-answer portion of this 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 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 which may not be under the Company’s control, which 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, 2014, under the caption Risk Factors and other reports filed 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 Gregg Mollins, President and CEO of Reliance.

Good morning, everyone, and thank you for joining us today. I am extremely pleased with our operational performance in the second quarter of 2015, which is a testament to the quality of our management team in the field as well as to our business model. Despite ongoing industry headwinds that further pressured metal pricing in the quarter, we were able to increase our FIFO gross profit margin to 25.7% up from our strong 2015 first quarter FIFO gross profit margin of 25.4%. We believe that our continued focus on small, quick turnaround orders and inventory turns allows us to maintain consistent gross profit margins and that our significant investments in equipment in recent years to provide higher levels of value-added processing to our customers, has further enhanced our ability to maintain and improve our gross profit margins, even during difficult business environments. We believe our position in the market has also contributed to our ability to increase our market share. With our tons sold in the first half of 2015 decreasing by 0.6% compared to the first half of 2014, compared to the MSCI industry average of a decrease of 5%. Although our second quarter tons shipped were lower than we had anticipated, we believe that underlying customer demand remains relatively strong. In particular, the aerospace and automotive end markets remain strong and we see ongoing opportunities for continued growth in these markets. We also continue to be encouraged by slowly improving momentum in our activity levels in the nonresidential construction market our largest end market. Although lower oil prices have significantly reduced demand for our business serving the energy market, our ongoing cost reduction initiatives and disciplined sales strategy have helped mitigate the impact on our overall profitability. Pricing for all commodity types continued to weaken as the second…

Thanks Gregg and good morning everyone. My remarks today will focus primarily on [indiscernible] carbon steel alloy products as well as our outlook on certain key end markets we sell those products into. Bill will then address our aluminum and stainless steel markets. From an end market perspective, automotive, serviced mainly through our toll processing operations in the U.S. and Mexico remains very strong, and we believe this will continue. Our toll processing operations in the U.S. are expanding primarily in support of aluminum product now going into the automotive market. We are also adding a facility in Mexico to support the increased automotive activity in that area. Heavy industries such as railcar, truck trailer, shipbuilding, barge and tank manufacturers, and wind and transmission towers are all doing reasonably well. Agricultural and construction equipment have come off their peak, but we still are seeing good demand and remain well position to continue to service these important end markets. Nonresidential construction is our largest end market and although we have seen demand continue to improve, it remains well-below the peak levels. We are optimistic that this important market will continue to improve gradually throughout 2015 and 2016. We have made significant investments in our businesses serving this space that will allow us to provide a higher level of value added processing to these customers as their volumes increase. Energy, that being oil and natural gas, has slowed down due to the severe drop in oil prices and the related reduction in drilling activities. Our second quarter volume sold into our energy businesses declined approximately 35% from our volume in the first quarter of 2015, which was down 30% from the prior year. Because we began the process of reducing our expenses and inventory levels related to that market early in the…

Thanks Jim. Good morning everyone. The aerospace market continues to be a bright sport for us. Demand is remain strong and we expected to improve throughout the balance of the year as build rates in the commercial airline market continue to grow. We've increased our presence in this area with the acquisition of All Metal Services, headquartered in the U.K., in August of 2014. As well as the opening of two new AMI metals facilities in France and Turkey in the first quarter of 2015. Sales to the aerospace market have increased as a percentage of our total sales. Now representing approximately 8% to 10% of our total sales in the second quarter of 2015. In addition to these growth activities our same-store tons sold also increased significantly reflecting the improved underlying demand. This is a good market for Reliance and we expect to continue to grow in this area as we support our global customers. The majority of the products that we sell to the aerospace market are heat treated aluminum products, especially plate, as well as specialty stainless and titanium products. Given the strong underlying demand the price for aerospace aluminum plate as improved over last year. Lead times are out 24 to 28 weeks up from the 13 to 17 weeks we saw in January. Both price increase announcements for this year have held and this product is in tight supply. We believe the aluminum played overhang that is existed for the past few years as generally work through the system. Our sales of common alloy up slightly from the volume standpoint with most of our product being sold sheet metal fabricators that support a variety of end markets. Demand on general engineering aluminum plate remain strong, with domestic lead times around 25 weeks. The price increases…

Thanks, Bill and good morning everyone. Given the market conditions discussed earlier our 2015 second quarter tons sold and average selling prices were down compared to the 2014 second quarter as well as the 2015 first quarter. Sales from the companies we acquired in 2014 help frozen the decline in our tons sold as well as our average selling price. Since most of these companies sell specialty products or provide higher level of value-added processing, resulting in selling prices above our company-wide average. Our same-store average selling price has declined sequentially in each month beginning in September 2014 with our June 2015 average selling price down $200 per ton or a 11.5% from our September 2014 average selling price. Based on our second quarter same-store tons sold this equates to a loss of nearly $300 million in quarterly sales or $1.2 billion per year due to the impact of metals pricing and as we have explained before the majority of lost sales from pricing also result in lost earnings Because metals pricing, especially for carbon steel products declined more than we had anticipated and in 2015 second quarter as compared to the 2015 first quarter, we increased our annual estimate of our LIFO adjustment to income of $80 million compared to our prior estimate of $30 million. This resulted in a LIFO credit or income of $40 million for the 2015 first half with $32.5 million or $0.27 earnings per diluted share included in our cost of sales in the 2015 second quarter compared to $7.5 million of LIFO income or $0.06 per share in the 2015 first quarter In the 2014 second quarter, when metal prices were generally rising we recorded a LIFO charge or expense of $5 million or $0.04 per share. This adjustment reflects LIFO accounting working…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Tony Rizzuto of Cowen and Company. Please go ahead.

Thank you. The next question is from Timna Tanners of Bank of America Merrill Lynch. Please go ahead.

Thank you. The next question is from Phil Gibbs of Keybanc Capital Markets. Please go ahead.

Thank you. The next question is from Luke Folta of Jefferies. Please go ahead.

[Operator Instructions]. Then the next question is from Andrew Lane of Morningstar. Please go ahead.

Thank you. Our next question is from Brett Levy of CRT Capital. Please go ahead.

Thank you. We have no further question in queue at this time. I would like to turn the conference back to management for additional remarks.

Okay. Well, listen, we'd like to say thank you for your support and for participating in today’s call. And we would like to remind everyone September we will be in Boston presenting that KeyBanc Capital Markets basic materials and packaging conference. Now we hope to see many of you there. Have a great day. And thanks again for participating on the call.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. And thank you for participation.