Greetings and welcome to the Reliance Steel & Aluminum Company First Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Miss, Brenda Miyamoto, Investor Relations for Reliance Steel & Aluminum Company. Thank you. You may begin. Brenda S.Miyamoto - Reliance Steel & Aluminum Co.: Thank you, operator. Good morning and thanks to all of you for joining our conference call to discuss our first quarter 2018 financial results. I'm joined by Gregg Mollins, our President and CEO; Karla Lewis, our Senior Executive Vice President and CFO; Jim Hoffman, our Executive Vice President and COO; and Bill Sales, our Executive Vice President of Operations. 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, 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, 2017 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…

Thank you. Our first question comes from the line of Chris Terry with Deutsche Bank. Please proceed with your question.

Hi team, and thanks for taking my question. The first one is just on the guidance of negative 1% to 1% change in volumes in 2Q. With the May 1st deadline approaching on the temporary exemptions on the Section 232 and potential decrease in the imports after that, have you taken that into account or what is that guidance predicated on from an import sense? Gregg J. Mollins - Reliance Steel & Aluminum Co.: It's really not. It's based on demand, okay, and historical patterns that we've experienced in the past. We think there was a little bit of hedge buying, okay, in the first quarter that we think will affect us minorly, but still affect us in the second quarter here. So that's why it really wasn't affected by imports at all. Our guidance is based on demand.

Okay, okay. Thank you. And then just wondering if you could talk a little bit more about the aerospace entry into India and how that's going? William K. Sales, Jr. - Reliance Steel & Aluminum Co.: Yeah, it's Bill. Yeah. It's a little bit behind schedule, just getting some of the permits on place, but we've got equipment ready to put into the building and we're just waiting on final permits to move the equipment in there and get things up and running.

Okay. Thank you. And then just the last one on the capital management side. I guess, given the move in the share price, how are you thinking about buybacks versus the increase in the dividend that you've had recently in forward periods? Gregg J. Mollins - Reliance Steel & Aluminum Co.: We're going to be looking at buybacks as we have in the past. We bought $50 billion worth of our stock repurchased in the first quarter. And if we have a dip that we feel is advantageous for us to get back into the market and purchase our stock, we'll definitely do that.

Okay. Thank you. That's all for me. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Thanks.

Thank you. Our next question comes from the line of Seth Rosenfeld with Jefferies. Please proceed with your question.

Good morning. Thanks for taking my questions today. First question on pricing, and then a second question on M&A, please. On the pricing outlook, thanks for your earlier comments on sustainability, perhaps the incremental upside into Q2. Can you just speak a little bit more about any discrepancy you're seeing, especially within the carbon steel market between flat and long products or plate products, both in regards to activation for pricing, but also whether or not you've seen any of the pre-buying amongst customers being exaggerated in any of the specific product categories? And then second question on M&A, can you talk a little bit more about how you're thinking about sector valuations, you did comment, there's more assets coming to sale, but are you still comfortable with valuations at these levels and then more recently there's been some talk about ThyssenKrupp looking to dispose their material services business. Can you talk us through your level of interest in an asset of that size? Thank you. James D. Hoffman - Reliance Steel & Aluminum Co.: Yeah, hi, Seth. This is Jim Hoffman. I'll address the pricing and Mr. Gregg would like to address the M&A. As far as pricing is concerned, we don't know what's going to happen, all we know is, we don't think there will be a dramatic reduction. As far as the pricing between long and flat, both products continue to go up, we had rapid increases in activations before the quarter, they continue to climb in there. Like Gregg said earlier, we think that was based on demand. As there – was there some hedge buying, perhaps we don't – we have no way of telling that, but we like the environment, environment, as we've always said, the prices are higher, that's a good thing for…

Thanks. Just one follow-up then on M&A. Obviously, your focus today isn't in the U.S. business. I know there have been some strategic investments overseas. When you think about large scale M&As or interest in diversification perhaps into the European market or do you think that for something focus on more commodity grade products or the focus will remain in the U.S.? Gregg J. Mollins - Reliance Steel & Aluminum Co.: You know we're open to you know basically any opportunity there is based on profitability, management team, et cetera. So it's – we're not inclined to, you know – the profitability we prefer it to be in North America. But very honestly wherever geographically an opportunity will arise we're going to look at it closely.

That's great. Thank you very much. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Thank you.

Thank you. Our next question comes from the line of Timna Tanners with Bank of America Merrill Lynch. Please proceed with your question. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Hey. Good morning, everyone. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Good morning. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: I wanted to ask on the LIFO guidance. I understand – I appreciate the detail there and I know it's tricky, but Karla when you talk about H2 price decline, is that just for conservatism and for the explanation of how you pick that LIFO number or do you have any specific conviction on what drives that? Karla R. Lewis - Reliance Steel & Aluminum Co.: Yeah, so Timna, we're typically a little conservative here and you know trying to figure out what's happening with pricing next week, its difficult at this point. So we think prices are going to hold through the second quarter and just factoring in the potential for some decline in the back half. You know at the end of next quarter based on where we are on pricing, we'll update our guidance, we do every month. We do our LIFO calculations. So based upon what the actual is through the first quarter of the year, we think the $100 million is the right number for the year at this point, that assumes prices go up a bit from where we are in the first quarter and remember, it's not just the price increases that have been announced, we still have to receive some of that higher cost inventory into our books to get to the $100 million. But yeah, we're just anticipating that potentially in the back half, there might be some downward pressure, but…

Thank you. Our next question comes from line of Novid Rassouli with Cowen & Company. Please proceed with your question. Novid Rassouli - Cowen & Co. LLC: Hey, everyone. Thanks for taking my questions. Just to start with gross margins. I was wondering if you guys can quantify how much of the uplift in margins in the first quarter was due to inventory that was purchased at lower prices and that you were immediately able to push through better pricing on? Karla R. Lewis - Reliance Steel & Aluminum Co.: Yeah. We can't really quantify that specifically. But I think the trend during the quarter Novid, was what we normally anticipate, you know that we do push the price increase from the mills onto our customers, most of our customers prior to receiving in the higher cost inventory; and we'll still be in that environment in the beginning of the second quarter, but to try to quantify what percentage of our gross profit margin was from that, we can't really do. Novid Rassouli - Cowen & Co. LLC: That's fair. And then did I hear you guys correctly that FIFO gross profit margins are expected to compress in 2Q sequentially? Karla R. Lewis - Reliance Steel & Aluminum Co.: Yeah, so, because during the first quarter there were multiple price increases across most of our products. We have not received that higher cost inventory into our system yet, so based on our normal trend, we would anticipate that bringing them down to the extent prices do continue at the mill level to increase during the second quarter, we'll continue a little bit of that margin enhancement during the second quarter, until the price increases from the mill level slowdown and our inventory cost catches up. Novid Rassouli - Cowen &…

Thank you. Our next question comes from the line of Chris Olin with Longbow Research. Please proceed with your question.

Hey, good morning. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Good morning. James D. Hoffman - Reliance Steel & Aluminum Co.: Good morning.

I wanted to just ask another question on the M&A side and I guess where I'm curious is, if you feel like your asset footprint today is strong enough to capture a lot of this multi- year growth you're talking about in aerospace and the aircraft build rates. And I'm also curious if you would consider either increasing your exposure in some of these specialty materials, like nickel alloys or titanium, or would you even consider moving into like products like composites or maybe fasteners? Gregg J. Mollins - Reliance Steel & Aluminum Co.: The answer to that, Chris, is we're basically open to everything, okay? We're not adverse to getting into composites. We're in titanium now, high nickel alloys... James D. Hoffman - Reliance Steel & Aluminum Co.: Right. Gregg J. Mollins - Reliance Steel & Aluminum Co.: ...which we're in. So that's something actually that is attractive to us. So any and all opportunities, when it comes from the M&A side that would enhance our profitability. We're all in. Karla R. Lewis - Reliance Steel & Aluminum Co.: We try to be careful not to compete directly with our customers when we look at M&A, but certainly those are opportunities we can look at. William K. Sales, Jr. - Reliance Steel & Aluminum Co.: And, Chris, when it comes to the footprint, we've got a pretty strong and solid footprint from an aerospace standpoint, always open and looking where we might expand that more, but we're very comfortable with our footprint.

And aerospace today is still about 10% of your sales? Karla R. Lewis - Reliance Steel & Aluminum Co.: Yeah, about 10% to 12%. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Yeah, 10% to 12%.

And then the other question I just wanted to ask was, you are thinking on construction demand and if you've seen anything different in terms of infrastructure orders and do you have enough exposure on that side? James D. Hoffman - Reliance Steel & Aluminum Co.: This is Jim, it was a strong quarter. It continues kind of a slow burn up, I mean, it wasn't anything unusual. It was just a good quarter and we anticipate that going up. A lot of the forward-looking data, all look strong. We've got several really fine non-residential construction type businesses and we're proud of them and they continue to do well. So we don't see any of that changing, but the first quarter wasn't really a surprise when it came to non-residential construction.

Okay. Thanks for your time. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Thank you.

Thank you. Our next question comes from the line of Phil Gibbs with KeyBanc Capital Markets. Please proceed with your question.

Hey, good morning. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Good morning. James D. Hoffman - Reliance Steel & Aluminum Co.: Hi, Phil.

Hey, Bill, you mentioned you've got some fixed selling prices into the, I believe, aerospace heat-treat market. Should we surmise that the mills have fixed selling prices to you as well? Just trying to understand that dynamic? William K. Sales, Jr. - Reliance Steel & Aluminum Co.: Yes. Those agreements are typically where we've got a fixed selling price locked into the customer, and then we've got that fixed cost locked into the mill and the materials hedged. Gregg J. Mollins - Reliance Steel & Aluminum Co.: So basically the margin is locked in. William K. Sales, Jr. - Reliance Steel & Aluminum Co.: Yeah.

Okay. So you made you made that comment specifically just to say, look, aluminum has gone up, but don't expect our aerospace profitability to kind of blow out. I think that was kind of a qualifying statement you were making? William K. Sales, Jr. - Reliance Steel & Aluminum Co.: That's correct. James D. Hoffman - Reliance Steel & Aluminum Co.: Yeah. Gregg J. Mollins - Reliance Steel & Aluminum Co.: About 50% of the aerospace business that we do is contractual with the fixed prices on the buy and on the sell, so our margins are secured, and then the other 50% is spot, okay. So there we would hope that our margins would be enhanced. James D. Hoffman - Reliance Steel & Aluminum Co.: Right.

So you're talking both about heat-treat and then your other products that you're selling, it's not just that piece you're talking about the whole aerospace -? Gregg J. Mollins - Reliance Steel & Aluminum Co.: We're talking about aerospace period. William K. Sales, Jr. - Reliance Steel & Aluminum Co.: Yeah. Karla R. Lewis - Reliance Steel & Aluminum Co.: But the majority is heat-treated aerospace.

Okay, perfect. And Gregg obviously you put some guidance out for the second quarter demand or shipments, specifically April how is April looking relative to the average 1Q daily trends so far? Gregg J. Mollins - Reliance Steel & Aluminum Co.: We're, you know, from a volume standpoint it's pretty steady with the first quarter. So, you know, but we have some price increases that are helping us in that regard. So, I think our guidance that we gave on volume plus 1, minus 1; that range is from what we can see today. That's good guidance and we'll see what happens on the pricing front. And Phil as you know, okay, okay, our growth in revenue dollars and profitability and margins and everything are driven more by pricing than it is by volume. So I got to tell you something Phil, we're really excited about the second quarter, okay, first quarter was awesome, okay. So we're kind of sitting over here giggling and laughing and having a big smile on our face because we knocked the hell out of the ball in the first quarter and we're going do even better in the second quarter.

Nice. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Karla just kick me by the way, she's kicking me.

I'm excited too, we can be excited together. Karla, my last question is just on the 8% same-store year-over-year increase in SG&A. You pointed to some of the drivers. How much of that increase or maybe a percentage of that increase was driven by the, the wage and maybe compensation, component and how much of it was related to freight. I'm just trying to isolate a couple of things. Karla R. Lewis - Reliance Steel & Aluminum Co.: Yes, so the majority of it was compensation related. We've consistently given wage increases every year. So overall those are usually about 3% companywide. So, so that's the bulk of it. But you know we are making higher profitability levels, Gregg is very excited. So we are paying higher commissions and incentives because our people who are making higher earnings levels for us. But certainly, there were some increases in freight, but the majority of our orders we deliver on our own trucks, as we've talked about before. Fuel charges went up. So our, our freight rates are up, noticeably where we use third-party carriers, we can control our freight rates a little more, but the bulk of the SG&A was compensation related, base wage rates are you know mainly May-January 1st, some of that was there for the fourth quarter.

Okay. Well, Gregg, you've got a – you've got a really great poker face. So if you're if you're excited things must be good. Thanks. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Thanks, Phil. Yeah, things, things are pretty good. We're enjoying ourselves from a business point of view. Thank you.

Thank you. Mr. Mollins, there are no further questions at this time. I'll turn the floor back to you for any final comments. Gregg J. Mollins - Reliance Steel & Aluminum Co.: Okay. Well thanks again for support and for participating in today's call. We'd like to remind everyone that we will be in Boston in presenting at KeyBanc's Basic Materials Conference in May. We hope to see many of you there and with that, have a great day.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.