Reliance Steel & Aluminum Co. (RS) Q4 2025 Earnings Report, Transcript and Summary

Greetings, and welcome to the Reliance Inc. Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando with 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 Fourth quarter and Full year 2025 financial results. I am joined by Karla Lewis, President and Chief Executive Officer; Steve Koch, Executive Vice President and Chief Operating Officer; and Arthur Ajemyan, Senior Vice President and Chief Financial Officer. A recording of this call will be posted on the Investors section of our website at investor.reliance.com. Please read the forward-looking statement disclosures included in our earnings release issued yesterday and note that it applies to all statements made during this teleconference. The reconciliations of the adjusted numbers are included in the non-GAAP reconciliation part of our earnings release. I will now turn the call over to Karla Lewis, President and CEO of Reliance.

Good morning, everyone, and thank you for joining us to discuss our fourth quarter and full year 2025 results. In 2025, we demonstrated strong operational execution and continued to expand our market share, underscoring the strength of our business model amid a complex macroeconomic backdrop and competitive operating environment. Our commitment to smart, profitable growth once again fueled strong results. In 2025, we increased our tons shipped by 6.2%, resulting in record tons sold of 6.4 million, outperforming the industry by over 7 percentage points with our U.S. market share increasing to approximately 17% in 2025 from 15% in 2024. In addition, we increased our tolling tons by 1.2% to 7.4 million customer-owned tons processed through our tolling operations. Our shipment growth was in carbon long and flat-rolled products, where we also increased our gross profit margin year-over-year. By continuing to focus on exceptional customer service and maintaining our strong relationships with key domestic suppliers, we were successful winning new business, and we were able to better leverage our operating expenses over higher volumes, leading to increased FIFO profits that further strengthen our long-term industry-leading position. We increased our FIFO gross profit margin by 90 basis points in 2025 compared to 2024 through strong pricing discipline, mainly on increased mill prices for carbon products, supported by healthy demand. However, significant tariff-related aluminum cost increases were more difficult to pass through due to plentiful supply and soft demand, especially in our commercial aerospace and semiconductor markets. Our 2025 non-GAAP gross profit margin of 28.8% is just outside of our estimated sustainable range, which we attribute primarily to tariff-driven annual LIFO expense of $114 million. We expect our gross profit margin to improve in 2026 as the impact of tariffs and trade uncertainty lessens, maintaining our annual range of 29% to 31%. We increased 2025 non-GAAP FIFO pretax income by $80 million. However, full year 2025 earnings per diluted share declined 10.2% from 2024. Excluding the impact of significant LIFO adjustments in both periods, 2025 non-GAAP FIFO earnings per diluted share increased 13.5% year-over-year, thanks to the talented teams we have throughout the Reliance family. Our strong cash flow generation continues to fuel profitable growth and deliver meaningful returns to our stockholders. In 2025, we generated $831 million in operating cash flow, which we redeployed into high-value initiatives, including investments in advanced processing equipment and other projects that support our long-term growth objectives. For 2026, we're announcing a capital expenditure budget of $275 million as we focus on maximizing returns on the significant capital deployed in recent years. Including carryover spending, we anticipate 2026 total CapEx spending of $300 million to $325 million with approximately half directed toward growth initiatives. Our scale, financial strength and operational capabilities position us to pursue compelling opportunities that may emerge in 2026, including acquisitions of well-run profitable businesses that broaden our footprint and strengthen our portfolio of metal solutions and through additional capital expenditure investments as attractive customer opportunities arise. We also remain committed to returning capital to our stockholders, delivering $849 million in 2025 through dividends and share repurchases. We increased our dividend by 4% to an annual dividend rate of $5 per share in the 2026 first quarter. In summary, Reliance's diversified business model and unrivaled scale help to offset market-specific weaknesses and support stable performance through economic cycles. Our expansive capabilities and financial strength enable us to invest when others retreat, positioning us to capture market share and accelerate growth as markets stabilize and improve. As we enter 2026 in a healthy demand and strong pricing environment, we are seeing increasing optimism from our customers and increasing activity around large-scale projects across several key end markets, including infrastructure, data centers, energy and defense. Reliance has the capabilities, talent and capital to continue to grow both our core small order quick turn business while also winning new business from these larger projects. We are excited to continue delivering disciplined profitable growth in the year ahead. I'll now turn the call over to our COO, Steve, who will review our demand and pricing trends.

Thanks, Karla, and good morning, everyone. I'd like to begin by recognizing our teams for their solid operating performance and continued commitment to safety. Our 2025 total recordable incident rate improved in 2025, reflecting the discipline and care they bring to serving our customers each and every day. I also want to acknowledge our mill suppliers. When tariffs were imposed, our supply chain remained uninterrupted, which we attribute to our long-standing relationships with our mill partners and our disciplined supply chain strategy. Finally, we appreciate our customers, and we look forward to continuing to be their valued, reliable metal solutions provider and supporting their growth and success in 2026 and beyond. Turning to our demand and pricing trends. Fourth quarter tons sold declined 5.4% from the third quarter of 2025 and increased 5.8% from the fourth quarter of 2024, significantly outperforming the service center industry, which reported a decline of 1.2% over the same period last year and exceeding our expectations of up 3.5% to 5.5%. Delivering this level of outperformance in a market shaped by cautious buying and intense competition reflects the strength of our smart, profitable growth strategy and the benefits of our continued investments. Carbon volumes remain the primary driver of growth, particularly in the nonresidential construction and certain subsectors of manufacturing. Our fourth quarter average selling price increased about 1% from the third quarter of 2025, exceeding our expectation of relatively flat pricing. Aluminum pricing continued its upward trend in response to tariffs raising the Midwest premium. As Arthur will discuss in our outlook, we believe pricing for most products will improve in the first quarter of 2026. Turning to our end markets. Nonresidential construction represented roughly 1/3 of our fourth quarter sales, primarily from carbon steel tubing, plate and structural products. Shipments remained strong in the fourth quarter, supported by overall demand in heavy civil and public infrastructure work, along with record levels of data center and related energy infrastructure builds. These areas of strength outweigh pockets of softness in private nonresidential construction. Our broad participation and scale across a wide geographic footprint continue to support market share gains in this space. General manufacturing, also about 1/3 of fourth quarter sales remained highly diversified across products, industries and geographies. Shipments increased year-over-year, driven by strength in military, industrial machinery, including data center equipment, consumer products, rail and shipbuilding. We are also seeing higher nuclear-related demand tied to emerging small modular reactors activity and data center energy needs. Our performance across key product groups and our ability to move quickly into emerging markets continue to differentiate Reliance in the important general manufacturing market segment. Aerospace products accounted for approximately 10% of fourth quarter sales. Commercial aerospace demand remains subdued due to continuing elevated inventory levels in the supply chain, which we anticipate will gradually improve in 2026 as record OEM backlogs convert to increased build rates. Defense and space-related aerospace programs remained consistent at strong levels throughout the fourth quarter. Automotive, which we primarily serve through our toll processing operations and therefore, are not included in tons sold, represented about 4% of fourth quarter sales. Underlying demand has remained solid, supported by our recent capacity investments. Semiconductor market remained under pressure due to ongoing excess inventory in the supply chain during the fourth quarter. Overall, our people, our strong mill relationships and our commitment to customer service continue to differentiate Reliance and support solid performance. The capital investments we've made over the past several years are meaningfully contributing to our growth and our commercial and operational discipline drive our industry-leading profitability. I will now turn the call over to our CFO, Arthur Ajemyan, to review our financial results and outlook.

Thanks, Steve, and thanks, everyone, for joining today's call. We delivered a strong fourth quarter with record shipment levels, driving continued market share gains, improved profitability and solid cash flow. As Steve mentioned, volumes were strong and pricing improved 90 basis points sequentially, mainly due to tariff-driven increases in aluminum product pricing. Although we're able to pass through most of the tariff-driven aluminum cost increases during the quarter, ample supply limited the incremental margin benefit, resulting in modest near-term margin compression. Higher-than-anticipated aluminum costs contributed to fourth quarter LIFO expense of $39 million, above our $25 million estimate and increased full year LIFO expense to $114 million compared to our $100 million annual estimate. On a FIFO basis, which is how we measure our day-to-day performance, fourth quarter non-GAAP pretax income rose 28% year-over-year. This reflects the combined benefit of roughly 6% higher volumes and 6% higher selling prices, which more than offset the modest 30 basis point decline in our non-GAAP FIFO gross profit margin. Non-GAAP fourth quarter earnings per diluted share were $2.40, an 8% increase year-over-year. LIFO expense represented $0.56 per share for the quarter compared to the $0.35 per share assumption embedded in our guidance. Including the year-end LIFO and income tax true ups, our results reflected a net unfavorable impact of $0.25 per share. Adjusting for these items, non-GAAP EPS would have been within management's guidance at $2.65. For the full year 2026, we currently estimate LIFO expense of $100 million, mainly from higher carbon and aluminum product costs. Accordingly, we expect $25 million of LIFO expense for the first quarter of 2026. Turning to expenses. Same-store non-GAAP SG&A expenses increased 6.7% in the fourth quarter and 4.4% for the full year compared to 2024, driven by inflationary wage adjustments and higher variable warehousing and delivery costs associated with our increased tons sold. We also incurred higher incentive compensation in both periods from improved FIFO profitability. On a per ton basis, same-store non-GAAP SG&A expenses were down nearly 1% for the full year, highlighting the operating leverage generated by our growth strategy. I'll now address our balance sheet and cash flow. We generated strong cash flow from operations in the fourth quarter of $276 million. Our ability to consistently produce strong operating cash flow across market cycles supports our disciplined and opportunistic capital allocation strategy. During the quarter, we funded $73 million of capital expenditures, paid $64 million in dividends and repurchased $200 million of our common stock at an average price of roughly $279 per share. During 2025, repurchases reduced our total shares outstanding by 4%, and we have about $763 million available for additional share repurchases under our current share repurchase program. In addition, we increased our quarterly cash dividend rate by 4.2%. This marks our 33rd increase since our 1994 IPO to a current annual rate of $5 per common share. At the end of the year, our total debt was $1.4 billion. Our leverage position remains favorable with net debt-to-EBITDA ratio of less than 1, providing significant liquidity to support continued execution of our capital allocation priorities. Looking ahead, we expect healthy overall demand in the first quarter of 2026 in several key end markets, subject to ongoing domestic and international trade policy uncertainty. For the first quarter of 2026, we estimate our tons sold will be up 5% to 7% compared to the fourth quarter of 2025, which is consistent with seasonal trends and relatively flat compared to the first quarter of 2025, mainly due to tariff-related demand pull forward in Q1 2025. We expect our average selling price per ton sold for the first quarter of 2026 will improve 3% to 5% compared to the fourth quarter of 2025 due to healthy demand and higher mill pricing. As a result, we anticipate these dynamics will contribute to a modest improvement in FIFO gross profit margin in the first quarter. Based on these expectations, we anticipate first quarter 2026 non-GAAP earnings per diluted share in the range of $4.50 to $4.70, reflecting year-over-year growth of approximately 19% to 25% and inclusive of quarterly LIFO expense of $25 million or $0.36 per diluted share. In summary, we are pleased with our strong organic growth, continued market share gains and disciplined pricing execution in 2025. While we experienced some temporary margin headwinds from tariff-driven cost increases and excess inventory in the supply chain for certain pockets of the commercial aerospace and semiconductor end markets. Tariffs have had an overall positive impact on our business with higher selling prices supporting a meaningful year-over-year increase in FIFO profitability as 2025 progressed and as we head into 2026. This concludes our prepared remarks. Thank you again for your time and participation. We'll now open the call for your questions. Operator?

[Operator Instructions] The first question is from Katja Jancic from BMO Capital Markets.

Maybe starting on the gross profit side. So you expect the margin to improve modestly in first Q, which I think based on your guide implies you will be getting kind of closer to the lower end of your sustainable range. How should we think about margin in the rest of the year? In other words, is there opportunity to further increase it? Or is this the new norm where you might be leaning more on the lower end of that range?

So from a gross profit margin standpoint, while we did have some headwinds during 2025, most specifically on the aluminum side with the tariffs driving up the price of the Midwest premium significantly. And typically, we can get ahead of those price increases, and it was more difficult given the reason for the price increase being tariff-driven. There was plentiful supply of inventory, aluminum inventory available and demand was soft to okay. So typically, when you have price increases, they're driven by healthy increasing demand, and that wasn't the backdrop for the aluminum price increases also with stainless. So we had a little margin pressure there. But what we were really proud of were our teams on the carbon side who are both growing their tons sold significantly and getting ahead of the price increases because those increases, there was demand to support that. And as we go into 2026 and towards the end of 2025, you saw continued price increases in certain of the carbon products that are strong, and we're seeing really good activity and increasing demand as we go into 2026 for those products. So that -- those are really good markets for us. On the margin pressure on the aluminum, remember, costs continue to increase during Q4 for aluminum products, and our teams have basically caught up and they're able to pass through the increased cost from the tariffs. But given the demand outlook, which is improving a bit, we're still seeing some pressure on getting a premium on those tariff costs, but we think that's going to improve as demand improves for those products as we move through 2026. So while Q1 2026, we may be near the low end of the range, as we see continued price increases, we would expect margins to trend up from that during the year as long as there's demand supporting the price increases.

And then you mentioned that the outlook on the demand side, at least right now, it seems still pretty healthy. But there are some potential tailwinds from lower interest rates and manufacturing activity seems to be picking up. How are you thinking about the kind of volume growth in the second half of the year, especially with you focusing on profitable growth?

Yes. So Katja, we do anticipate -- it's hard for us to look out a full year. It depends a lot of -- there are a lot of factors in the market that can change. But we are very positive at this point on 2026 based upon the quoting activity we're seeing right now. We are seeing, especially on the carbon side, which is the majority of our volume, we are seeing, like I mentioned earlier, good activity. There are a lot of large projects out there in different areas that are being quoted. There are purchase orders in place on some of that. We are seeing some of our customers on the carbon side buy a little heavier than they had historically. We think part of that is because they're coming off of low customer inventory levels. But also mill lead times are going out, which is always a positive sign. And people are looking to be able to secure the metal. I think with Reliance, we really appreciate our strong relationships with our domestic mill partners who are there to help support us to be able to get the metal to increase our shipments and support our customers.

The next question is from Martin Englert from Seaport Research Partners.

I wanted to touch on structural products. It was a larger portion of the mix in fourth quarter. Just can you provide an update regarding what you're seeing with demand and also remind us of the margin profile of these products and how your demand typically compares to what's happening upstream at the mill level?

So for structural beams, we just experienced another price increase last week. The base price is the highest it's ever been recorded. And that's due to demand throughout the non-res markets. Lead times are being pushed out. That's one of our larger products that we do stock. So we're seeing demand in public infrastructure, energy infrastructure and data centers. So our outlook for wide flange beams and structural tubing is very bullish.

And can you remind us generally if there's any timing difference between when you see activity and the mills see activity and just overall how the margin profile compares to the average margin for the group?

Yes. From your question on the lag from the mills, I mean, in general, on kind of the nonresidential infrastructure side, typically, we've seen about a 6- to 9-month lag on large projects in particular. But we are -- we seem to be participating a little more in those larger projects. We're not the prime on the large projects in most cases, but we are getting more meaningful share in some of those large projects. So could the lag be a little less now? Possibly, but that's kind of been the trend historically. And from a margin side, we have healthy margins on our structural book of business. Years ago, people who followed us for a long time, we used to talk about higher return businesses in aerospace and energy and semiconductor. They have higher value products. But for the last few years with, I think, the pricing improvements we've seen generally in the market on the carbon side as well as our companies doing more value-added processing with the investments we've made to expand their capabilities. The carbon margins for most of our products are right up there, and we don't see the big difference. So a very good margin profile on our structural book of business.

Appreciate that color. Semiconductors, the inventory overhang persisting here in the end market. When was the last time that there was an up cycle here, if you can remind me and any signs or visibility as to when the inventory situation may abate and kind of how the cycle might -- downcycle might compare to other ones historically?

Yes. Well, Martin, if you'll recall, I mean, semiconductor had been on an uptrend for quite some time. And I would say through most of 2023, industry-wise, it was record level shipments in semiconductor. We were participating in that. We had really good years at record levels. We believe a lot of customers were very concerned about being able to secure the metal they needed with how strong the market was. And so they bought ahead quite a bit. And quite honestly, for us, some of our book of business in the U.S. is somewhat dependent on which customers you're with because some are participating in the AI upswing more than others. So I would say, just being honest, we're a little behind on that side with certain parts of our customer base. But we have seen some slight improvement in some of the equipment makers, but we're expecting late this year, we might see that inventory being worked through and start to see a bit of an improvement there.

The next question is from Phil Gibbs from KeyBanc Capital Markets.

Karla and team, maybe just talk about the M&A environment. I know you weren't very active in 2025, but certainly a big part of your longer-term growth trajectory. So just curious in terms of what may be out there, how is the valuations -- how are the valuations looking for some of the things that might be appealing to you all?

Yes, on the M&A front, I guess, I would say I felt like we were active in 2025. We were looking. We were -- there were deals out there. We just didn't close any in 2025. So there are opportunities out there. There are some that are attractive to us. But to your question on valuations, we have to be able to agree upon that. And in some instances, we are. Others, there are some other companies who might be willing to pay more than we are. Maybe there's a strategic reason for them that's different from our view. And with the -- we are still very interested in acquiring the right companies, and we're continuing to look at those and will complete where we think it's appropriate, and we can agree on the valuation. But I would also point out that 2025, our 6% tons growth over 2024, that was over 300,000 tons of incremental volumes we were shipping. And if you compare that to a dollar value if we acquired a company, that would be like acquiring a $650 million revenue plus company. And it was a significantly lower cost for us to make some investments in facilities and processing equipment to be able to increase our volumes like that as opposed to paying a premium to buy a $650 million company out there through an acquisition. And that doesn't mean that there aren't $650 million companies out there that we would want to acquire. But I just want to highlight the efforts that our team has made and the significance of being able to grow organically.

And then on the gross margin piece, the 29% to 31%, just wanted to qualify that, that is a LIFO range that you all are talking about as being sort of your long-term sustainable range? And then also to that, any way to size up the drag on gross margins maybe in 2025 from the aerospace and semis headwinds, which doesn't sound like that it's all going to completely normalize this year, but maybe by 2027.

Yes. So on the gross profit margin, the 29% to 31%, that is an annual LIFO range. LIFO makes it less volatile than on FIFO on a FIFO basis. And as we mentioned, we did increase our FIFO gross profit margin in 2025 over 2024. Again, a lot on the carbon side with great execution by our teams in the market. Kind of, I guess, somewhat unique, we would say, in 2025. Aluminum is typically around 15-ish percent of our sales, but it made up over half of our LIFO expense because those increased tariff costs also impact our LIFO adjustment. So we had kind of an outsized impact because of those tariffs. And as we said, if prices start to stabilize a little more on the aluminum side, we can catch up with our margins and maybe start to see some improvement there. But again, we feel strong with how our people are executing, but LIFO did have a big impact on 2025 from aluminum. Arthur, anything you would add.

Yes. I think, same thing kind of headed into 2026, the LIFO estimate, you have a fair amount of aluminum carryover, right? So the cost increases that happened in Q4, you're going to be receiving that material throughout '26. So again, we're going to have disproportionate contribution from aluminum to LIFO expense. So it's somewhat unique, like this is not a typical dynamic that we've experienced before, this type of a mismatch from LIFO to the FIFO margin side. But nonetheless, we're executing really well. I think the one nuance that perhaps kind of gets lost is aluminum prices have been going up. While there's been some slight margin compression, we're still realizing higher gross profit per pound. So from that perspective, overall profitability is improving from higher selling prices. It's just you're mathematically experiencing some margin compression because to Karla's point, on the cost increases, while they're being passed through, we may not be able to get the full margin on that as we would on other cost increases that are supported by solid demand.

And then anything you all could discuss on aerospace and semis in terms of maybe how much that's impacting the gross margins right now from a basis point perspective?

Good question, Phil. So I think there'll be a little bit of an overlap with aluminum. But if you look at aerospace and semiconductor, let's say, less than 10% to 15% of overall sales and consolidated margin impact 50 basis points plus.

The next question is from Bennett Moore from JPMorgan.

In the context of the lower expected CapEx spend this year and notwithstanding the recent dividend hike, how might this directionally impact your appetite for share buybacks in '26?

I don't know that it significantly changes because we've consistently had an appetite -- strong appetite for acquisitions, for organic growth, for share buybacks and consistently increasing our dividend. So we continue to look for opportunities in all of those areas and not changed from the last few years. We've got the resources and the financial strength to execute in all of those areas. Our capital expenditure budget for 2026 is a little lower than the last few years, but we've had kind of outsized budgets the last couple of years. We've had some good greenfield projects in there. We've had a lot of investment in value-added processing equipment, which we're continuing to do, but we're really challenging our teams to look at the investments we've already made and make sure that we are maximizing the capabilities. And the equipment that we buy now is much more technologically advanced. It can do things faster. It's increasing some of our productivity. So we're really pushing our teams to maximize and look at what they have before we go out and spend more on additional capital. But that being said, the $275 million for this year, it's a good budget. It's rightsized. But as we've mentioned, there is a lot of activity as we -- from our customers as we go into 2026. And we are very open to increase our CapEx budget to support those customers and those opportunities if we see good profitable opportunities come in front of us. So that budget could increase as we go through the year, given solid opportunities in front of us.

And then coming to SG&A per ton, I think it was up around 1.2% in the fourth quarter despite record shipments. So wondering if anything to flag here, maybe it was the incentive comp. And then do you expect that this year-over-year growth trend to reverse in the first quarter? And what's your confidence that, I guess, for the balance of the year, we can see this metric trend lower?

Yes. Good question. So at a high level, that's what we've been focusing on, right, leveraging our cost structure with our smart profitable growth strategy. I mean, on a full year basis, our SG&A per ton, I think, trended down roughly 1%. So that's us basically being able to leverage our cost structure and drive incremental profit from the organic growth. I think quarter-on-quarter, Q4 to Q4, important highlight from a FIFO perspective, profits were up nearly 28%. So yes, absolutely, there's going to be year-over-year some incentive comp that is associated with that, that's going to affect the comparability. But overall, yes, that is an area of focus. And every year, there's inflation, obviously, and that's something that we have to give our people wage increases, et cetera. But to the extent that we're leveraging our cost structure and focusing on growth and driving profitable growth, that should work out the way we intend it to be.

The next question is from Matt Dushkin from Wells Fargo.

Just curious, are you all seeing any substitution to or away from aluminum? We're just kind of wondering what the boots on the ground are seeing with all the price volatility and you guys play into both the aluminum and the steel markets.

That is -- we have not seen that, at least not in a material way coming through. We know there's buzz about that out there, but we haven't seen any real impact in any of our markets from that. And as you commented on, we're in all markets. And so we're happy to support our customers in whatever products are the best use for their needs.

In some architectural usage, there's been substitutions from copper to aluminum or other products, which isn't a huge part of our business, but the copper spike has been substantial. So our customers are looking for more economical alternatives.

Okay. That's helpful. Yes, we've heard from copper to aluminum. Just shifting over on the plate markets. We seem to be gaining a lot of momentum there. Can you all provide any color on what's driving the relative strength versus other products? And whether or not you think it's underlying demand? Or is it more customer restocking right now?

So we're seeing customer restocking. We're seeing mill price increases. We're seeing mill lead times extend for the first time in quite some time. There's a lot of energy infrastructure, onshore wind, shipbuilding, defense work that's driving up the price and demand. There's also recently with the hot-rolled coil market being pretty tight, there's been substitution from sheet to plate, which is usually linked to sheet because it's more economic. So we think that when we see something like that, we think that there's real demand behind it.

The next question is from Phil Gibbs from KeyBanc Capital Markets.

Just regarding headcount and hiring, Karla, can you describe the environment there? I mean I know you guys grew your tonnage pretty solidly last year and seemingly have a reasonably positive outlook for your markets in 2026 as well. So just curious in terms of where you all stand on headcount or hiring and what your intentions may be?

Yes. I think at the end of 2025, our actual headcount was down a bit from the beginning of the year, up slightly during the year, which, again, I mentioned earlier, the advancements in some of the equipment we use, and our company is focusing on being more efficient. We shipped 6% more tons but had a pretty modest increase in headcount. As far as being able to fill positions and hiring, I would say the labor market is a little better than it had been, certainly better than just after post-COVID. But a lot of our jobs in the warehouses for drivers, those still take more time to fill. To get qualified people in, we have to do more training than we did 10 or 15 years ago as we're bringing people into the workforce. So it's not easy. It's still -- maybe you get -- you end up with one good, qualified person who stays out of 5 to 7 that you try out. But we're able and I think at Reliance, people like to work for a company that's growing and doing well. We try to treat our people well and pay them fairly, provide good benefits and do things to help give us an advantage in the market.

This concludes the question-and-answer session. I would like to turn the floor back over to Karla Lewis for closing comments.

Thanks again for joining our call today and for your continued support of Reliance. And before we close out today's call, I'd like to remind everyone that we'll be in Florida next week presenting at BMO's 2026 Global Metals, Mining & Critical Minerals Conference, where we hope to meet with many of you there. But I'd also like to once again thank our team throughout Reliance for all of your efforts that you do every day and for keeping our employees safe. And also, I like to remind everyone that even though there were some headwinds in 2025, we're really proud of what Reliance and our team accomplished then. And we're really excited moving into 2026, a healthy demand environment, a lot of good large projects that we're seeing out there that we've got the capabilities to participate in and strong pricing environment. So we're looking forward to 2026. Thank you.

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