I'll wrap up, and then we'll take your questions. So let's turn now to Slide 4 to get started. Earlier this morning, we announced our results for our fiscal '23 third quarter, which reflected adjusted EPS of $0.67 and adjusted EBITDA of $56 million. Our adjusted EBITDA per ferrous ton almost doubled versus the second quarter. We also continued our uninterrupted record of returning capital to our shareholders through the issuance of our 117th consecutive quarterly dividend. Sales volumes in the quarter benefited from seasonality, customer inventory restocking and higher production in both recycling and steel manufacturing. Our sequential nonferrous and finished steel sales volumes were up 26% and 30%, respectively. Our ferrous sales volumes were down 8% sequentially, primarily due to the timing of shipments that benefited the second quarter.

Supply flows improved seasonally but remained tighter than a year ago. So let's turn now to Slide 5 for a review of market conditions. Coming into the third quarter, demand for recycled metals was strong, driven by improved global steel demand and inventory restocking. As the chart in the upper left corner of this slide indicates, however, ferrous export prices softened during the quarter as global steel demand weakened. By the end of the quarter, ferrous prices had decreased about 16% from their March highs. U.S. domestic prices lagged the fall in export prices but have converged since the end of the quarter. Turkey's lower demand during the quarter was driven by lower steel production, elevated input costs and economic uncertainty leading up to their presidential election in May.

An increase in Chinese steel export volumes also impacted Turkey steel demand. Asia's weaker demand during the quarter was similarly impacted by higher Chinese steel exports and a slower-than-expected economic recovery in China with dampened market activity. Since the end of the quarter, ferrous export demand off the East Coast has shown a slight upward bias. Ferrous export prices Turkey reflect continued tight supply in the global Deep Sea market, an increase in demand for July shipments against lower than normal June scrap import volumes and less political uncertainty. Turkey's need for 5 million tons of steel to support rebuilding efforts in the Iskenderun region implies a need for around 6 million tons of ferrous scrap. We expect that even accounting for Turkish domestic scrap generated by earthquake cleanup activities, Turkey scrap imports should rise materially to meet this need In the Asian markets, ferrous prices since the end of Q3 have also stabilized, driven by expectations of Chinese increased fiscal stimulus and reduced steel exports, stronger demand in South Asia and slower seasonal scrap generation in the region.

Turning to nonferrous. Coming into the third quarter, we saw stronger demand for nonferrous products globally, including from restocking and the lifting of China's COVID lockdown. And similar to the ferrous market, prices for nonferrous weakened during the quarter as the slower economic activity in China impacted nonferrous metal consumers in Southeast Asia and India. Since the end of the quarter, prices have continued to soften a bit due to seasonally slower industrial activity. Turning to finished steel. While demand and prices came off their near-record highs, metal spreads remained robust during Q3. Although higher interest rates and tighter credit conditions could lead to softer demand, there are several offsetting trends, including demand supported by the U.S. infrastructure bill and the Buy America and Buy Clean directives.

Our Oregon steel mill with its range of low-carbon long products, including our net zero carbon emission green steel product line is well positioned to meet this rising demand. Let's turn now to Slide 6 to review the longer-term outlook for recycled metals. Decarbonization is a powerful structural driver of demand for recycled metals, which require less carbon to produce than mine metals. Many low-carbon technologies are widely acknowledged to be more metal intensive. As a result, the structural demand for recycled metals remains very positive. Supported by the increased focus on decarbonization and the transition to low carbon technologies, the anticipated structural deficits for copper and nickel and the increased demand for manufacturers and retailers to maximize their use of recycled materials and reduce the environmental impact of their activities.

We can see how some of these trends have already been translated into higher ferrous scrap metal usage by looking at the chart on this slide. Electric arc furnace steelmaking capacity, which uses ferrous scrap as its primary raw material has been expanding and is projected to increase further. Aligned with these structural trends, we continue to focus on providing products and services that meet this demand, such as our green steel products and our 3PR services. Our 3PR brand reflects a rapidly growing service and supply chain solution for our customers, enabling greater recycling rates, reductions in material going to landfill and improved carbon footprint and enhanced sustainability reporting. Turning now to Slide 7. As we often say, sustainability is at the core of what we do and how we operate and has been since our founding in 1906.

Photo by ant rozetsky on Unsplash

This quarter, we were honored to be named as one of TIME 100's Most Influential Companies. Our inclusion on this list reflects the contribution of all of our employees, who are leading the way in providing solutions to companies, governments and communities focused on carbon reduction and committed to supporting a circular economy. As a 117-year-old company with roots in the old economy, this recognition is a great example of how sustainability principles can be successfully and profitably applied to industrial companies. I encourage you to visit our website to view our latest sustainability report, which describes in more detail our multiyear people, planet and profit goals that underpin our sustainability framework. So let's turn now to Slide 8 for an update on our strategic priorities.

In an economic environment, characterized by market volatility and inflationary pressures we continue to be focused on managing the things within our control. Our third quarter results reflect meaningful progress and benefits from our strategic priorities. These priorities are directly aligned with the long-term trends of decarbonization and the corresponding need for more recycled metals and can be summarized as follows: first, technology investments in advanced metal recovery systems at our major recycling operations. These systems enable us to extract more nonferrous metals from our shredding activities, increase throughput and improve our margins, expand our product offerings and customer base and reduce materials going to landfills. As Stefano will describe in more detail, this quarter's results reflect a significant contribution from the Systems Commission to date.

Second, volume growth. We are highly focused on increasing our ferrous and nonferrous volumes through a combination of organic growth and recent acquisitions. Our multiyear focus on the strategic priority has led to an annual 6% volume growth rate between fiscal '16 and fiscal '22. On a year-over-year basis, our nonferrous sales volumes are up over 8%, driven by higher purchased nonferrous materials and the ramp-up of advanced recovery technologies. While our year-over-year ferrous growth rate in fiscal '23 is relatively flat, we expect the customer and product initiatives we have underway to drive future volume growth. Third, expansion of our products and services to meet the increasing demand for recycled metals. Examples include our green steel products and the 3PR services we provide to manufacturers and retailers.

And fourth, productivity initiatives that we undertake as part of our continuous improvement culture. These initiatives are particularly important in the face of inflationary pressures. In Q3, we achieved the full run rate of benefits from the productivity initiatives that we announced earlier in this fiscal year. So now let me turn it over to Stefano for a more detailed review of our financial and operating performance. Stefano?

Stefano Gaggini: Thank you, Tamara, and good morning. I'll start with a review of our consolidated results and provide an update on our ferrous sales and the market dynamics. Adjusted EBITDA per ferrous ton in the third quarter was $48, nearly doubled sequentially. And adjusted EBITDA was $56 million. Our performance benefited from higher average net selling prices for recycled metals coming into the quarter. Despite the increase in scrap flows resulting from normal spring seasonality, the expansion in metal spreads for recycled metals in the higher price environment was limited by the continued tightness of supply flows. Metal margins also benefited from shipments contracted before market prices began to soften in the second half of the quarter.

The movement in prices in the third quarter led to a modest benefit from average inventory accounting of approximately $2 per ferrous ton, significantly smaller than the $8 per ferrous ton benefit we saw in the second quarter. Our results also reflected a more significant contribution from our advanced non-tariff recovery technology program as we continue our ramp-up activities. These systems contributed meaningfully to the increase in non-tariff sales volumes of 26% sequentially. The contribution from finished steel products was a significant driver of our consolidated performance benefiting from seasonally higher construction demand and higher volumes and utilization. We also captured seasonally higher retail part sales at our pick and pull platform.

During the third quarter, we achieved a full quarterly run rate of benefits from the productivity initiatives we announced and implemented earlier in the fiscal year, targeting an aggregate annual benefit of $60 million, focused on a reduction of production costs, operating efficiencies and yield improvements as well as lower SG&A expense. While the magnitude of the inflationary pressure on operating cost appears to have diminished compared to recent quarters, mitigating increases in operating costs remains a priority. Turning to the ferrous dynamics in the quarter. Our ferrous sales volumes were down 8% sequentially against a tough second quarter comparison when volumes were up nearly 50% as they benefited from timing of sale of several previously delayed bulk shipments.

Average net selling ferrous prices were up 13% sequentially, reflecting shipments contracted at higher prices earlier in the spring. The share of domestic ferrous shipments was 47% in the quarter. Our top sales destinations for ferrous exports were Bangladesh, Turkey and Italy. Now let's move to Slide 10 for an update on nonferrous sales and the market dynamics. Average net selling prices for copper, aluminum and other nonferrous products were up 2% sequentially. Nonferrous sales volumes were up 26% sequentially, driven by increased purchases and higher production and recovery yields associated with our advanced nonferrous technology equipment. We sold our nonferrous products to 13 countries with the major export destinations being Malaysia, India and China.

Our product mix is highly diversified with sales of products recovered from shredding operations reaching around half of total nonferrous volumes. Now let's move to Slide 11 to provide an update on our technology investments. We continue to advance our technology program focused on increasing metal recovery of nonferrous material and generating more furnace-ready, higher-value products. Once fully operational, we expect our technologies to contribute to an increase of at least 20% of nonferrous volumes recovered from shredding operations. Product optionality gives us the ability to decide whether to process material into higher grade, depending on market conditions and demand for the products. We also have the option to flex purchases of third-party materials such as Zorba for processing and upgrading in our facilities.

As shown in the slide, our initiative comprises 13 systems in total. Of these, six are advanced separation systems, which are mostly already operational with one in commissioning. We also have seven primary nonferrous systems recovering aluminum and copper, which are the main drivers of the projected increase in recovery volumes. In June, we began commissioning on the West Coast of one of its primary recovery systems bringing to five the number of those that are either operational or in various stages of commissioning and completion. This leaves two major copper recovery systems to construct on the West Coast to complete our investment program of which one is targeted to start commissioning by the end of the summer. The other one is currently awaiting permitting approval.

Subject to that step, we still targeted construction and commissioning by the end of calendar 2023. We continue to target substantial achievement of the estimated run rate benefits to EBITDA of $10 per ferrous ton by the end of calendar year 2023 upon completion of final permitting, construction, commissioning and ramp-up for all systems. The contribution to performance from these technologies in the third quarter increased to more than half of the targeted full run rate as we achieved higher yields on our primary nonferrous recovery systems, and also benefited from particularly supportive pricing for the nonferrous products we generated. We expect the overall capital investment for these projects to be in the range of $130 million with approximately $5 million left to complete the projects.

Now let's move to Slide 12 to discuss our steel mill performance. Finished steel sales volumes of 142,000 tons were up sequentially by 30% as we benefited from strong seasonal construction demand in the West. Our average mill utilization was 97%, which was higher than the U.S. average of approximately 76% for the period. Average net selling prices for finished steel decreased slightly sequentially. Metal spreads at our mill remained robust, although down from the record highs experienced during calendar '22. In the medium and longer term, we believe our mill stands to benefit from demand expected to be created by the U.S. infrastructure build. Now let's move to Slide 13 and discuss cash flow, capital structure and our outlook for the fourth quarter.

In the third quarter, cash flow generated from EBITDA profitability was more than offset by a detriment from working capital associated primarily with the timing of sale and collection for several ferrous bulk shipments at the end of the quarter. Through the first three quarters of our fiscal year, our cumulative operating cash flow is slightly positive. CapEx spend in the third quarter was $27 million. For fiscal '23 as a whole, we continue to project our CapEx to be in the range of $110 million to $120 million slightly less than one-third of the fiscal '23 CapEx is for growth projects, including our technology initiatives. We are remaining for maintaining the business and environmental-related capital projects. Excluded from this annual range is CapEx spend associated with the repair and replacement of the shredder enclosure building at our Everett facility during fiscal '23, which has been approximately $12 million to date.

As these expenditures are expected to be substantially recovered through insurance over time. We received proceeds from insurance of approximately $8 million in the third quarter related to this project. Lowering the net CapEx spend in the quarter to just below $20 million. Net debt was $346 million at the end of the third quarter. Availability under our credit facility remains sizable with a borrowing capacity of $800 million and a maturity of August 2027. Net leverage was 27% at quarter end, and the ratio of net debt to adjusted EBITDA was 2.5x. We also returned capital to shareholders through our quarterly dividend. Our effective tax rate on adjusted third quarter results was 30.6%, slightly higher than expected due to the effect of certain tax items in the quarter.

Year-to-date in fiscal '23, our adjusted tax rate approximated 30%, which rate we would anticipate for the full fiscal year as well, subject to company performance and other tax items. Although there are more than two months left in the quarter, I'll now turn to our outlook for the fourth quarter of fiscal '23, which is based on market conditions and information we have today. Looking at some of the sequential dynamics in the current lower price environment, we expect an accounting detriment from our average inventory costing method in the range of $5 per ferrous ton in the fourth quarter. Excluding the impact of average inventory accounting of $5 per ferrous ton, we expect our consolidated adjusted EBITDA per ferrous ton to be around $40. We expect our ferrous, nonferrous and finished steel sales volumes to be in the range of their third quarter levels.

The lower price environment for ferrous and nonferrous recycled metals together with continued tightness in supply flows is also expected to lead to a sequential contraction of metal spreads, compounded by the fact that in the third quarter, we benefited from selling ahead while prices declined in the latter part of the quarter. We expect the contribution from our steel mill to remain robust, but declined sequentially, including due to a planned maintenance outage during the summer. As the chart on the top left shows, we have a multiyear track record of generating positive annual operating cash flow through the cycle. We aim to continue this trend and generate positive operating cash flow in the fourth quarter and for the full fiscal 2023. And with that, I'll turn the call back over to Tamara.

Tamara Lundgren: Thank you, Stefano. Our results this quarter reflect the positive impact from our strategic investments and our productivity initiatives. We have a strong balance sheet, a track record of delivering positive operating cash flow through the cycle and ability to invest in the growth and productivity of our company, and an uninterrupted record of returning capital to our shareholders. Despite current market headwinds, the structural demand for recycled metals remain positive, and our strategic focus and investments in recovery technologies, volume growth, new products and services and productivity are delivering meaningful benefits. In closing, I'd like to thank our employees for their resilience and their dedication to working safely while continuously serving our customers and communities, supporting our suppliers and demonstrating the critical and essential role of our business and industry in the economy.

You have demonstrated once again why we have continued to be a leader in the recycling industry for over a century. And now operator, let's open the call for questions.

See also 15 Best Beach Towns for Retirement and 20 American Cities with the Lowest Uninsured Rates.

To continue reading the Q&A session, please click here.