Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How are you all thinking about Capex for 2025? A: Edward Lehner, President and CEO, stated that they are dialing back Capex to the $50 million to $55 million range. This decision follows an extended Capex investment cycle, and the focus is now on operationalizing and integrating these assets into the network to generate returns.
Q: Can you take us through some of the progress on University Park since the September showing? A: Edward Lehner explained that University Park has seen a 20% increase in bookings from their bottom. The facility is now providing consistent high-quality service with short lead times, and productivity is improving as the equipment is working well.
Q: How did your core unit gross margins trend through the fourth quarter and into the first quarter? A: Edward Lehner noted that Q4 saw significant margin compression, particularly in non-ferrous metals. However, transactional margins are now inflecting higher, and they expect contract business margins to improve as lagging prices reset through 2025.
Q: How are you managing your business around tariffs, particularly outside the US? A: Edward Lehner mentioned that while there may be currency headwinds in Canada, Mexico, and China, the majority of revenue is generated in the US. They are well-positioned with strong inventory and supply chains, and they expect prices to increase as tariffs take effect.
Q: Why is net debt reduction not part of your capital allocation if you are so far out of your leverage target? A: Edward Lehner clarified that net debt reduction is a priority. They expect to bring leverage down as they operationalize Capex investments and as industry conditions normalize through 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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