Steel Dynamics, Inc. (NASDAQ:STLD) Q4 2022 Earnings Call Transcript

Steel Dynamics, Inc. (NASDAQ:STLD) Q4 2022 Earnings Call Transcript January 26, 2023

Operator: Good day, and welcome to the Steel Dynamics Fourth Quarter and Full-year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management’s remarks we will conduct a question and answer session and instructions will follow at that time. Please be advised this call is being recorded today, January 26, 2023, and your participation implies consent to our recording this call. If you do not agree to these terms, please disconnect. At this time, I would like to turn the conference over to David Lipschitz, Director, Investor Relations. Please go ahead.

David Lipschitz: Thank you, Jenny. Good morning, and welcome to Steel Dynamics Fourth Quarter and Full-year 2022 Earnings Conference Call. As a reminder, today’s call is being recorded and will be available on our website for replay later today. Leading today’s call are Mark Millett, Chairman, President and Chief Executive Officer of Steel Dynamics; and Theresa Wagler, Executive Vice President and Chief Financial Officer. The other members of our senior leadership team are joining us on the call individually. Some of today’s statements, which speak only as of this date, may be forward-looking and predictive, typically preceded by believe, expect, anticipate or words of similar meaning. They are intended to be protected by the Private Securities Litigation Reform Act of 1995 and should actual results turn out differently.

Such statements involve risks and uncertainties related to integrating or starting up new assets, the aluminum industry, the use of estimates assumptions in connection with anticipated project returns and our steel, metals recycling and fabrication businesses as well as to general business and economic conditions. Examples of these are described in the related press release as well as in our annual filed SEC Form 10-K under the headings Forward-looking Statements and Risk Factors, found on the Internet at www.sec.gov, and is applicable, in any later SEC Form 10-Q. You will also find any referenced non-GAAP financial measures reconciled to the most directly comparable GAAP measures in the press release issued yesterday entitled Steel Dynamics reports fourth quarter and full-year 2022 results.

And now I’m pleased to turn the call over to Mark.

Mark Millett: Thank you, David. Good morning, everybody. Thank you for being with us for our fourth quarter and full-year 2022 earnings call. And as I think you saw, operationally, our teams had a very, very, very solid fourth quarter. Our New Millennium Building Systems platform generated record steel fabrication earnings, Sinton is showing significant operating improvement with a clear path to profitability in the second quarter of 2023. Our new aluminum group is making great progress on our aluminum flat-rolled investments, and I will share more details later in the call. Relative to full-year 2022, the entire Steel Dynamics delivered an exceptional performance with record sales, earnings and cash flow generation. I think it was a tremendous achievement, and I’m incredibly proud of our team.

They are the foundation of our company, and they are the ones that have truly driven our success over the years. It is their culture of excellence and the strategic positioning executed over the last number of years that allows us to maximize opportunities resulting in higher lows and higher highs through all market cycles. However, none of this matters without keeping our teams safe. Often, employees are described as a company’s most important resource. But for Steel Dynamics, they are more than that, they are a family. And now we number over 12,000 strong. We are continually focused and provide the very best for their health, safety and welfare. We are actively engaged in safety at all times at every level, came in to top of mind and an active conversation at all levels through the organization.

And with that focus, the team’s safety performance improved significantly in 2022. We but there is certainly more to do as we will not rest until we consistently achieve our goal of zero injuries. But before I add any more detail, Theresa, would you like to give us some detailed financial results.

Theresa Wagler: Thank you, Mark. Good morning, everyone. I add my sincere appreciation and congratulations to the entire team. We continue to hit new milestones throughout the company achieving record annual performance in 2022, with record revenues of $22.3 billion derived from strong product pricing and volumes across all of our operating platforms. Record operating income of $5.1 billion and net income of $3.9 million or $2.92 per diluted share, and record cash flow from operations of $4.5 billion with EBITDA of $5.5 billion. As Mark mentioned, is truly an exceptional performance. Regarding our fourth quarter 2020 results, net income was $635 million or $3.61 per diluted share which includes additional performance-based special compensation of $24 million or $0.09 per diluted share that was awarded to all nonexecutive eligible team members and recognition of their extraordinary performance and costs of approximately $168 million or $0.67 per diluted share associated with our Sinton Texas flat-rolled steel mill ramp.

Our fourth quarter 2022 operating income declined 35% sequentially to $759 million due to lower realized selling values and seasonally lower shipments within our steel operations, which individually generate operating income of $178 million with shipments of 3 million tons in the fourth quarter. Our flat-rolled steel mills were negatively impacted during the quarter with high-cost pig iron that was purchased earlier in 2022 during the early stages of Russia and Beijing of Ukraine. Based on current pig iron prices of $500 per ton versus our average cost incurred in the fourth quarter, earnings were negatively impacted by about $80 million. We expect to see that continue into the first quarter and the negative impact is likely to be around $60 million as we work through all the higher price pig iron before the end of the first quarter.

For the full-year 2022, operating income from our steel operations was $3.1 billion, representing the second strongest year in our history, with record annual shipments of 12.2 million tons. Fourth quarter operating income from our metals recycling operations improved to $14 million based on increased volume and metal spread expansion despite lower average selling values. For the full-year 2022, operating income from our mills recycling operations was $130 million. Due to lower volume and average selling values, our spare scrap prices fell nine out of 12 months during the year. It was sequentially lower than the record results in 2021. Our Mexican recycling operations have proven to be a strategic key for both sourcing scrap for our Southern steel mills and driving profitability.

I want to say a sincere thank you to the Zimmer and Roka team. We continue to effectively lever the strength of our circular manufacturing model, benefiting both our steel and metals recycling operations by providing higher quality scrap to our steel mills which improves furnace efficiency, lowers cost and reduces company-wide working capital needs. And once again, our steel fabrication operations achieved record quarterly operating income of $682 million as metal spreads continue to expand based on steady product pricing and lower steel input costs, which more than offset the impact of seasonally lower shipments. steel joists and deck remains solid as evidenced by our continued strong order backlog and which extends through the first half of 2023.

Our steel fabrication platform also achieved another record year in 2022, with operating income of $2.4 billion eclipsing last year’s record of $365 million. Congratulations to the entire team, well done. This demonstrates the power of our circular manufacturing model and the natural hedge our steel fabrication business provides to steel price shifts. During the fourth quarter of 2022, we generated strong cash flow from operations of $1.1 billion due to strong results in the release of working capital. For the full-year, we generated a record $4.5 billion, our cash generation is consistently strong based on our differentiated circular business model and highly variable low-cost structure. At the end of the year, we had liquidity of $3.4 billion comprised of cash and short-term investments of $2.2 billion and our fully available unsecured revolver of $1.2 billion.

During 2022, we invested $909 million in capital investments of which over half related to ongoing construction of our four new flat-rolled coating lines and our aluminum flat-rolled mill investments. For 2023, we believe capital investments will be in the range of $1.5 billion, the majority of which relates to our aluminum flat-rolled investments and the completion of our flat-rolled coating lines. Since our last call, we also announced the location for our aluminum rolling mill as Columbus, Mississippi. Mark will share the strategy of the location later in the call. We are also incredibly pleased to have received near-term state incentives for the project, of $250 million with meaningful additional tax benefits to occur over the next 15-years.

During the fourth quarter, we maintained our cash dividend of $0.34 per common share after increasing at 31% in the first quarter of 2022. We also repurchased $413 million of our common stock in the fourth quarter. For the full-year, we paid cash dividends of $237 million and repurchased $1.8 billion or 12% of our outstanding shares, representing a 53% net income shareholder distribution rate. At the end of the year, $1.3 billion remains available under our current share authorization program. Since 2017, we have increased our cash dividend per share by 119% and we have repurchased $4.2 billion of our common stock, representing 31% of our outstanding shares. These actions reflect the strength of our capital foundation and consistently strong cash flow generation capability and the continued optimism and confidence in our future.

Our capital allocation strategy prioritizes high-return strategic growth with shareholder distributions comprised of a base positive dividend profile that is complemented with a variable share repurchase program, while we remain dedicated to preserving our investment-grade credit designation. We have strategically placed ourselves in a position of strength to have a sustainable capital foundation that provides the opportunity for meaningful strategic growth and strong shareholder returns while maintaining investment-grade metrics. Our free cash flow profile has fundamentally changed over the last five years from an annual average of $580 million between 2011 and 2015 to $2.6 billion today between 2018 and 2022. Our recently announced aluminum investment is consistent with our unchanged capital allocation strategy.

We will readily fund our flat-rolled aluminum investment with available cash and cash flow from operations. We also plan to continue strong and responsible shareholder distributions as we have clearly demonstrated. We are squarely positioned for the continuation of sustainable optimized long-term value creation. Sustainability is also a significant part of our long-term value creation strategy, and we are dedicated to our people, our communities under environment. We are committed to operating our business with the highest integrity. In that regard, we are excited about our newly formed joint venture with Aymium, a leading producer of renewable biocarbon products. We believe our first joint facility could decrease our steel Scope 1 greenhouse gas emissions by as much as 35%.

We have an actionable path toward carbon neutrality that is more manageable and we believe, considerably less expensive than may lay ahead for many of our industry peers. Our sustainability and carbon reduction strategy is an ongoing journey and we are moving forward with an intention to make a positive difference. We plan to continue to address these matters and to play a leadership role moving forward. As I conclude my remarks, I know there is some of you that follow more detail of our flat-rolled shipments. So for the fourth quarter, our hot-rolled shipments were 959,000 tons, our cold-rolled shipments were 109,000 tons, and our coated shipments were 1.1 million tons. Mark.

Mark Millett: Thank you, Theresa. Well, as was mentioned, steel fabrication saw phenomenal results in the platform in the year. And again, thank you to the Penal team. I think their effectiveness and their efficiency and their output per employee exceeds anyone in the industry. So congratulations to you and thank you for all you do there. It was another record quarterly performance, and record annual operating income of $2.4 billion for the year, with record shipments of 856,000 tons. Although the macro industries remain a little mixed, we believe nonresidential construction markets are and will continue to remain strong throughout the year. Despite lower ABI indications, I believe overall architectural firms remain optimistic for 23 Dodge Momentum Index improved around about 6% in December.

And nonresidential starts and build rates are also forecast to remain solid through the year. I think the continued onshoring of manufacturing businesses and the infrastructure spending programs will start kicking in that will continue to provide momentum for construction spending. More relevant, I think our customers certainly tell us demand remains solid in spite of economic uncertainty, and it is certainly confirmed by current order rates, not only in the joist and deck business but also our structural products business as well. Our steel fabrication order backlog extends through the first half of 2023, with strong pricing dynamics. And with continued solid order intake rates, we expect to see continued strong volume and performance those operations throughout 2023.

And the fabrication platform is not only a significant contributor itself, but it provides significant pull-through volume for our steel mills, allowing higher through-cycle utilization rates, and it also provides a meaningful natural hedge to lower steel pricing. Our MEL’s recycling platform had a solid year, especially in light of the challenging pricing environment. During 2022, ferrous scrap prices declined nine out of 12 months and volumes were marginally lower. The team managed to achieve metal margins that were only $2 per gross ton lower than record 2021 results. After seven consecutive months of declining price during 2022, First scrap prices improved in December and January, and it is our expectation that pricing will continue a moderate seasonal increase during the first quarter.

Our metals recycling geographic footprint provides a strategic competitive advantage for our steel mills and our scrap generating customers. In particular, our growing Mexican volumes will enhance our Columbus and symptom positions and the Zimmer and Roka acquisitions are performing very well, and integration is outstanding. Our metals recycling team continues to partner with our steel teams to expand traded scrap separation to provide more high-quality, low-residual scrap to our steel mills. The impact of these efforts, along with others in the industry, has demonstrated that innovation will provide ample scrap supply in the years ahead. Similarly, we are also exploring technologies for more effective aluminum scrap separation in anticipation of sourcing material for our upcoming aluminum flat rolled operations to maximize recycled content.

Steel operations achieved record shipments in the second best annual earnings in 2022, again, outstanding performance by an outstanding team. So thank you for each and every one of you there, record shipments of 12.2 million tons, operating income of $3.1 billion. Our 2022 steel production utilization rate was 92%, excluding Sinton, compared to a domestic industry rate of 78%. And again, our higher utilization rates are clearly demonstrated throughout all market cycles. Our value-added diversified product offerings differentiated supply chain solutions provides stickiness and the support of our internal pull-through manufacturing volume has clearly demonstrated time and time again that we can maintain a higher utilization than our peers in the industry.

As a key differentiator. It supports our strong and growing through-cycle cash generation capability and best-in-class financial metrics. Looking forward, customer order entry is good and backlogs are solid. In actuality, December was a historically high order intake month followed by another historic high order intake year-to-date. So we see a very, very, very solid market developing for the rest of the year. Auto production is expected to increase in 2023 from the lower 2022 rates. Dealer inventories have improved, but still remain meaningfully below historic norms. The build rate in 2022 was roughly 14.3 million units, and it is expected to grow a little to about 15%, 15.1% for 2023 and higher thereafter. Nonresidential construction remains solid as evidenced by fabrication backlog, and as I said, the long product steel volumes.

Residential construction has certainly softened. It is impacting HVAC, appliance and other housing-related products, but fortunately, much of our portfolio is biased toward replacement. Oil and gas activity is driving improved orders for OCTG and line pipe and solar continues to grow. And I think generally, this market strength is clearly supporting market price appreciation and in particular, the challenges with OMS in Mexico, has certainly changed the regional sort of markets and the Mexico a stand in Mexico and the U.S. market is certainly benefiting from that. In Sinton, the downstream coating lines are running well. They are running below full capacity, though, as the rest of the mill continues to work through start-up items. The hot mill, and that is the good news, the homes turned the corner, running more consistency, approaching 65% capability month-to-date.

We have been experiencing very, very long sequence lengths on the case recently up to 22 hours at a time. We are achieving days in excess of 85% capacity, and we should be around about 150,000 tons for the month of January and improving thereafter. Our current utilization is certainly being impacted by certain supply chain issues related to bearings and roles. This is specific to the casted roles in the segments. But we expect to have this resolved before the end of the first quarter, which will allow for a much stronger production for the rest of the year. Additionally, high-priced pig iron inventory is being drawn down through the quarter and the raw material input cost was normalized for Q2 through the rest of the year. While financial performance will likely be flat there in the first quarter, as we consume that high-price pig iron we expect significant events in both productivity and earnings in Q2.

Mill production dimensional capabilities improving there. The hot strip mill design is certainly allowed for thermal mechanical rolling, allowing production of higher strength grades with lower alloyed content and associated alloy cost, and we have already been approved and shipped some API grades. I think experience to-date certainly affirms our technical and process choices, and there is no doubt that this is the next-generation electric arc furnace-based flat-rolled steel technology of choice going forward. We continue to grow our exceptional through cyclical operating and financial performance continues to support our cash generation and growth investment strategies. We have the four value-add flat-rolled steel coating lines under construction.

These projects have gone well, and they are targeted for start-up in the second half of 2023. We have a galvanizing line and paint line going in at Sinton and similarly into Heartland, and we are seeing very good customer interest for that new volume. Currently, we are the largest domestic nonautomotive coater flat rolled steel with and annual coating capacity of over six million tons, these four new lines will increase that capacity by an additional 1.1 million tons. We have created unique supply chain solutions for our customers, which allow our downstream lines to remain always fully utilized with our highest margin products. Switching to aluminum, market response from both current and new customers across all markets has truly been incredible.

To recap the project itself the 650,000 metric ton per year aluminum flat roll facility. The main mill facility will be located in Columbus, Mississippi. It is close to the Southeastern markets and well positioned to serve Mexico. It is on the KCS rail line, which connects us again to Mexico to bring slab up and material back down to Mexico and it also connects to Canada to bring primary aluminum down from the sources up there. We intentionally located it on the TVA power grid to allow supply green energy. And we have water access by the Tom Big B waterway. So the transportation structure is good for us. We attained an attractive incentive package and having our current our Columbus steel mill close by. It allows us to draw on that facility for talent or professional services, and there will be a transition or transfer of many of our folks there which will have an immediate infusion of our culture to that aluminum facility.

So we are excited about that. The mill itself will have on-site melt slab capacity of roughly 600,000 metric tons and will be supported by two satellite recycled aluminum slab casting centers. One will be located in the Southwest U.S. and one in SLP Mexico. Both sites, we have – letters have been sent in place, and we are under due diligence, but I believe it will serve us very, very, very well. And obviously, the strategic thought there was to place the slab centers in areas of surplus scrap and the California Western market and Mexico will have an abundance of UBC material. The mill itself, again, is going to be equipped with the two cash lines, the coating line, downstream processing and packaging lines. We have actually expanded the product scope there to include additional scrap processing and treatment to maximize recycled content.

It is a state-of-the-art facility, and we will be serving the sustainable beverage and packaging markets, both body and TAM, the automotive sector and industrial sectors. Breakdown would be 300,000 tons of can sheet, 200,000 tons of auto and about 150,000 tons of industrial, or the principal equipment is on order, allowing for a pretty firm startup of the mill mid-2025. We believe the Mexican slab center will start up in the second half and the Southwest U.S. slab Center early 2025. The total project cost, including the recycled slab centers has grown a little from our initial $2.2 billion estimate. The increase is somewhat associated with – now that we have truly defined the equipment costs. But we have also added scope as I said, we put in a scrap processing and treatment and segregation at both the slab centers, which has increased that number a little and today, we estimate a firm budget of about $2.5 billion.

It will be 100% funded with available cash and cash flow from operations. So there is no additional debt or financial needed to push this thing forward. And we clearly expect to see about $650 million to $700 million of through-cycle annual EBITDA, with an additional $40 million to $50 million arising from our recycled Omni Source efforts. From an investment premise and we have talked about it before, but we see the aluminum market, not unlike that in the steel industry, when we started SDI some 30-years ago. It is an industry that has essentially older assets, there has been little reinvestment over the years, heavy legacy cost, there is inefficiency and sort of high-cost operations. And the advantage compared to any other steel market that we have entered is there is actually a supply side deficit.

Every other market in steel has always been oversupplied, and we have had to use our culture and low-cost strategies to penetrate those markets. With aluminum, there is a clear, clear supply deficit will certainly aid the ramp-up and a very, very quick profitability of that project. Certainly business alignment, we believe it is sort of an adjacent industry, so to speak. It is going to allow us to leverage our core competencies of constructing design, constructing, ramping up very, very large capital assets. It will allow us to leverage our recycling footprint, Omni Source is the largest North American recycling of nonferrous products, including aluminum. We recycle over GBP 1.2 billion, half of that is aluminum to there. I believe we will certainly be able to infuse the project with our culture, and that will power a very low cost, very high efficiency operations.

So we are very, very excited and we are certainly excited from the reception we are getting from those aluminum customers. Looking forward, we are certainly excited and passion by our future growth opportunities as they will continue the high returning growth momentum we have consistently demonstrated over the years. We were recently added to the S&P 500 Index. I feel that is a true testament to our people and to the financial strength and maturity of our company. We are arguably one of the top five steel producers in the world as measured by market cap today and the third largest in North America by capacity and we certainly have the best financial metrics of any of our peers. And all these achievements have been achieved in a relatively short time frame, and that could not be accomplished without the phenomenal commitment of our extraordinary people.

Everyone has had an impact and everyone contributes each and every day. We are celebrating our 30th year in business later this year, and there are only better things to come. Our teams and the culture they create on our foundation, and I thank each of them for their passion and their dedication. And in turn, we are committed to their wealth firm, their health and their safety. And I remind those listening today that safety for yourselves and each other is our highest priority each and every day. Our success is also driven by the loyal support of our customers who have become partners and friends over the years and together, we have created many innovative supply chain solutions, creating value for all. And we look forward to providing similar value and optionality to all our new customers as we continue to expand our product offerings in the steel arena, but also in the new aluminum market that we are entering.

And finally, thank you to all that have invested in us. There is a growing number that recognizing the power of our culture, the resilience of our business model and the potential outsized depreciation that are significant yet disciplined growth will return. We certainly look forward to creating new opportunities for all of us today and in the years ahead. So with that said, I would love to open the floor up or the call up for questions.

See also 15 Countries Where Bitcoin is Legal or Illegal and 15 Biggest Chinese State-Owned Companies.

Q&A Session

Operator: Thank you. Your first question is coming from Emily Chieng of Goldman Sachs. Emily your line is live.

Emily Chieng: Good morning, Mark and Theresa and thank your taking my question. I would like to start with the aluminum rolling mill and what progress you have made there. Maybe curious as to how many sort of contract negotiations or discussions you have started to have with different customers. Maybe what end markets you have been targeting so far and as you think about how Steel Dynamics may ultimately disrupt this industry, are there any indications that the pricing construct that we have historically seen of this industry could change.

Mark Millett: Thank you good morning and thanks for your question. I do believe that – when one says disrupt an industry that can be taken both positively and negatively. I think from our perspective, we look at it from a very positive nature, creating optionality for the customer base, many of our existing steel customers also buy and consume aluminum and so it is great to be able to create further value for them. I do believe that our advantage and we have seen that over the last 30-years in steel, in that the power of our culture allowing us to leverage state-of-the-art equipment tends to drive very, very effective, highly efficient, low-cost operations and in any commodity any commodity market, the low-cost producer will survive and thrive and allow superior financial metrics through the cycle.

And so the mill itself, the combination again of our culture, as stated on the equipment, just simply the plant layout, the high recycled content that we will enjoy the improved yield impact through the process, the low overhead cost all will combine to provide a very low cost solution and allow us to, I think, penetrate those markets quite effectively. Will that change the pricing environment? I don’t think so. We will be just a partial participant initially anyway in that marketplace.

Theresa Wagler: From a progress perspective Emily, I think that Mark mentioned earlier that we do have locations that we have in mind and we are negotiating right now for both of the recycled slab facilities plus we now have a location. And so there is a lot of excitement happening in Columbus, Mississippi. Last year, we spent about just a little over $120 million on the investments going forward, just to kind of recalibrate since we do have an increased amount of $2.5 billion. In 2023, we are likely to spend somewhere between $900 million and $950 million in capital, in 2024, $1.2 billion, with the remaining $200 million to $300 million during the startup year of 2025. So the teams are pushing forward very quickly.

Emily Chieng: Alright, thank you for the color.

Operator: Thank you. Your next question is coming from Carlos de Alba of Morgan Stanley. Carlos your line is live.

Carlos De Alba: Thank you very much Mark and Theresa. So on capacity, I would like to discuss capacity utilization, both for the industry, the company as well as the expected ramp-up of the fourth value-added current lines. So you guys have been running as you described in earlier comments at a higher capacity the decision in the industry. But now the industry in the U.S. is running around just slightly above 70%, 75%. How long can this persist, do you think, given that prices are increasing, supply discipline has been there so far. But there are some folks out there that are doing as well as you clearly by the numbers that you have posted. So how do you see the situation evolving Mark perhaps on these? And then in Mark, how do you see the ramp-up – the expected ramp-up of the capacity utilization of the four value-added lines. You mentioned that you see 80% in 2023 for Sinton, but any color on the fourth order lines would be great.

Mark Millett: Thank you Carlos, you were like a machine gun there. So I’m not so sure I got all your questions. I think from a ramp-up, I will work backwards, but from the ramp-up of the coating lines, those will be, I think, very, very, very strong. Obviously, we have many, many galvanizing lines, prepaint lines throughout the company, and we will harness all our technical resources there to get those lines up quickly. We certainly have the substrate available to fully load those lines. So I think the ramp up, again, those lines of start up at second half, perhaps fourth quarter and will ramp up quite quickly through the rest of the year into the following year.

Theresa Wagler: As it relates to the first part of your question, Carlos, around utilization for the industry. I would point out that even if you go back to more challenging times like 2015, et cetera, our utilization still remained very high, and that is because of the power of our pull-through volume, which we would anticipate as well. But we are really optimistic for 2023 with the additional on shoring of manufacturing businesses, which you are seeing in reality as well as with the infrastructure program and other investment opportunities. We think that steel demand in the U.S. will continue to stay steady to potentially increasing as well as the trade benefits of melting and casting in the U.S. for the U.S. producer. So yes, flat-rolled prices specifically have improved recently, which we think that they should have.

We don’t think that, that is going to have a negative impact. We think that will be a positive impact, and we think both industry utilization rates and ours specifically, should remain steady to improving in 2023.

Carlos De Alba: Alright, great. Thank you very much Mark and Theresa. I’m sorry Mark I will slowdown next time.

Operator: Thank you very much. Your next question is coming from Timna Tanners of Wolfe Research. Timna your line is live.

Timna Tanners: Hey good morning guys. I wanted to ask about the downstream, the fabricate segment please. Just a little clarity, if you could, on the guidance. As I understand it, you talked about some slippage from very high levels, but still above historical levels. But historically, EBITDA per ton prior to 2022 is $190 a ton, and 2022 is (Ph). I’m just wondering if you could provide a little more color on where we should fall between those two extremes. And maybe if you could, it would be helpful. I know Nucor mentioned a year-over-year comparison? Or if there is anything that you can provide a little more clarity on that, that would be great.