瑞莱恩斯 (RS) 2026财年第三季度业绩电话会：每股收益增长120%，发布第四季度指引lg...

核心要点

• Reliance, Inc.（NYSE: RS）公布2026财年第三季度净销售额创历史新高，在出货量增长和金属价格上涨的支撑下，同比增长43%。
• Non-GAAP稀释每股收益同比增长120%至8.02美元。其中包括美国边境墙项目带来的0.74美元贡献，以及每股2.74美元的后进先出法（LIFO）费用逆风。
• 创纪录的售出吨数环比增长4.3%，同比增长15.6%。后者超过了金属服务中心协会（Metals Service Center Institute）报告的行业整体10.1%的增幅。
• 季度毛利润 reached 15亿美元，环比增长12%，同比增长41%。Non-GAAP税前利润增长逾一倍，达到5.44亿美元。
• 管理层预计2026财年第四季度Non-GAAP稀释每股收益为7.40美元至7.60美元，其中包括每股约1.64美元的LIFO费用以及边境墙项目带来的每股约0.70美元贡献。
• 截至第三季度末，该公司债务为16亿美元，净债务与EBITDA的比率为0.8倍。董事会将股票回购授权额度扩大至25亿美元，且未设立明确截止日期。

关键财务数据

业务与运营表现

由于供应受限、交货周期延长以及需求增强支撑了更高的定价，碳钢引领了出货量的增长。Reliance的平均售价较2026财年第二季度上涨8.2%，而管理层此前预期为持平至增长2%。

非住宅建筑占第三季度销售额的略高于三分之一。数据中心、相关能源基础设施、大型土木工程和公共基础设施的需求保持强劲。美国边境墙合同为售出吨数的环比增长贡献了3.7个百分点。

通用制造业约占销售额的三分之一。出货量的同比增长受到工业机械、数据中心设备、造船、军事应用和工程机械的推动。

航空航天贡献了约8%的销售额。尽管库存仍处于高位，但随着原始设备制造商（OEM）组装速率提高和积压订单增加，商业航空航天需求有所改善。国防和太空活动保持强劲。

汽车行业约占销售额的4%，同比有所改善。在数据中心活动增加的支撑下，半导体需求也显著增强。管理层表示，与半导体加工相关的产品组合推高了隐含的不锈钢价格。

边境墙项目为第三季度每股收益贡献了0.74美元。尽管由于其产品组合降低了毛利率，但其低于平均水平的每吨运营成本使税前利润率提升了40个基点。

管理层业绩指引

Reliance预计2026财年第四季度Non-GAAP稀释每股收益为7.40美元至7.60美元。该展望包含预计1.125亿美元的LIFO费用（约合稀释每股1.64美元），以及边境墙项目带来的每股约0.70美元贡献。

管理层预计主要产品和终端市场的健康需求与供应紧张局面将持续，同时融入了正常的第四季度季节性影响。该公司指出，尽管出货天数减少且面临假日关门，第四季度出货量仍可能实现同比增长5%以上。

Reliance将2026财年全年LIFO费用预期从3亿美元上调至4.5亿美元。其全年资本支出展望仍维持在约3亿美元，其中约有一半用于战略性增长投资。

对于边境墙项目，管理层预计规模14.5亿美元的第一阶段将于2027年中期左右完成。Reliance已开始接收拟议中8亿美元第二阶段的预订，已取得订单金额占该金额的一半以上。管理层表示，如果第二阶段全部实施，该项目可能会持续到2027年，并有可能延长至2028年初。

风险与关注事项

• 碳钢板、热轧卷板、特种宽翼缘工字钢和热处理铝板供应紧张。供应限制可能会放缓2027年的内生性增长。
• 第四季度展望仍受国内外贸易政策、地缘政治状况以及正常季节性因素影响。
• 金属价格和出货量的提高增加了营运资金需求，不过存货周转率同比增长了10%。
• 货运、燃料、薪酬、员工福利以及可变仓储成本仍给销售、一般及管理费用（SG&A）带来通胀压力。
• 尽管商业需求有所改善，但航空航天领域的偏高库存依然存在。
• 边境墙项目的进度取决于供应商交货、政府指令、分包商活动以及第二阶段项目的执行情况。

分析师问答集锦

管理层将第三季度边境墙出货量描述为可持续的当前运行速率，而非提前释放的需求。据悉，来自国内生产商的供应以及向政府分包商的交付一直在顺畅进行，未出现重大中断。

Reliance预计其市场份额将持续扩大，尤其是在碳钢扁平材、中厚板和长材领域。管理层将份额增长归因于产品和终端市场定位、获得国内金属供应的渠道、增值加工以及客户服务。然而，管理层警告称，供应紧张和高基数可能会限制2027年内生性增长的步伐。

该公司表示，运营杠杆既反映了更高的售价，也反映了对现有基础设施更充分的利用，而固定成本并未同步增加。边境墙项目作出了显著贡献，而激励性薪酬和货运成本的提高部分抵消了出货量带来的杠杆效应。

Reliance仍主要专注于本土采购。管理层承认存在选择性的进口机会，但表示较长的交货周期、货运成本以及地缘政治不确定性使得目前不太可能出现大量进口库存涌入的情况。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Greetings, and welcome to the Reliance, Inc. Third Quarter 2026 Earnings Call.

[Operator Instructions]

As a reminder, this conference is being recorded.

[Operator Instructions]

It's now my pleasure to turn the call over to Kim Orlando with ADDO Investor Relations. Kim, please go ahead.

Kimberly Orlando

Thank you, operator. Good morning, and thanks to all of you for joining our conference call to discuss Reliance's Third Quarter 2026 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 in the Investors section of our website at investor.reliance.com. Please read the forward-looking statements disclosure included in our earnings release issued yesterday and note that it applies to all statements made during this teleconference. Reconciliations of the non-GAAP measures are included in the non-GAAP reconciliation section of our earnings release. I will now turn the call over to Karla Lewis, President and CEO of Reliance.

Karla Lewis

Good morning, everyone, and thank you for joining us to discuss our third quarter 2026 results. Reliance delivered an exceptional quarter with record quarterly net sales, our second highest gross profit dollars, and our third highest quarterly earnings per share. Reliance capitalized on a favorable market environment characterized by continued healthy demand and tight supply leading to increased pricing levels for most carbon steel products. Our long-term strategy of supporting both our valued customers in our key domestic mill partners positioned us particularly well to benefit from these dynamics.

Our scale, product diversification, expansive value-added processing capabilities, and ability to source the inventory our customers need, led by the strong execution of our teams in the field drove our exceptional results. The U.S. Department of Homeland Security border wall contract we were awarded earlier this year continued to ramp and delivered another meaningful contribution to our third quarter earnings.

Our smart, profitable growth strategy, once again, produced record quarterly tons sold, contributing to non-GAAP diluted earnings per share of $8.02, up 120% year-over-year. Our strong balance sheet and ample liquidity continue to provide us the means and flexibility to concurrently invest in our businesses, pursue strategic growth investments and return capital to our stockholders. Our full year 2026 capital expenditure outlook remains approximately $300 million, with about half allocated to strategic growth investments that enhance our processing capabilities, strengthen customer service, expand our footprint and increase volumes in attractive markets. And we continue to evaluate acquisition opportunities and stand ready to execute the right opportunities quickly.

During the quarter, we funded $79 million of capital expenditures, paid $64 million in dividends and repurchased $45 million of our common stock at an average price of approximately $395 per share. On October 20, our Board of Directors increased our share repurchase authorization to $2.5 billion without a set expiration date, further supporting our disciplined approach to returning capital to our stockholders. Since 2021, we have repurchased $3.4 billion of Reliance common stock at an average price of approximately $236 per share, reducing our outstanding common shares by 23% in that period.

Looking ahead, we believe Reliance is very well positioned as customer optimism remains high and strengthens across infrastructure, semiconductor, general manufacturing, and aerospace. Together, our proven business model, outstanding team and current market dynamics give us confidence in our ability to gain market share and invest through cycles to continue driving profitable growth and strong stockholder returns through the remainder of the year and into 2027. I'll now turn the call over to our COO, Steve Koch.

Stephen Koch

Thanks, Karla, and good morning, everyone. Our outstanding third quarter results reflect Reliance's ability to capitalize on favorable market conditions. This performance will not be possible without the relentless efforts of our teams across the Reliance family of companies. I want to thank each of them for their unwavering commitment to our customers and the safety of our employees.

Turning to our demand and pricing trends. The strength of the market was evident in our shipment volumes, which increased sequentially despite normal seasonal patterns and constrained material availability. Record tons sold increased 4.3% from the prior quarter, including a 3.7% contribution from the U.S. border wall project. Our third quarter year-over-year growth in tons sold of 15.6% outperformed the industry-wide increase of 10.1% reported by the Metals Service Center Institute. Carbon steel products continue to lead our tons sold growth. Our third quarter average selling price increased 8.2% from the second quarter of 2026, significantly exceeding our expectation of flat to up 2%.

Pricing for all commodities, particularly carbon steel products, increased during the quarter in a constrained supply, extended lead times, and strengthening demand. These dynamics highlight the value of our strong domestic mill relationships and reliable access to metal, which differentiate Reliance in a tight supply environment.

Turning to our end markets. Nonresidential construction represented a little more than 1/3 of our third quarter sales, primarily from carbon steel tubing, plate, and structural products. Third quarter shipments remained strong despite supply constraints, driven by sustained strength in data center and related energy infrastructure projects alongside solid demand in heavy civil and public infrastructure. Our participation in the U.S. border wall project further strengthened our presence in the public infrastructure sector of the nonresidential construction market.

General manufacturing represented about 1/3 of our third quarter sales. Our participation spans a diverse range of products, industries, and geographies. Shipments showed strong year-over-year growth, driven by industrial machinery, including data center equipment, as well as shipbuilding, military, and construction machinery.

Aerospace products accounted for approximately 8% of our third quarter sales. Commercial aerospace demand improved during the quarter with continued progress in OEM build rates and growing backlogs, though elevated inventories persist. Defense and space-related activity remained strong during the quarter. Automotive, which we primarily serve through our toll processing operations, represented about 4% of our third quarter sales. And as a reminder, our toll processing volumes are excluded from our tons sold. Demand improved compared to the prior year as our flexible toll processing operations quickly adapted to the variable demands of the automotive market.

Lastly, demand in the semiconductor market strengthened meaningfully. We're seeing momentum accelerate, supported by increased data center activity. In summary, Reliance continues to distinguish itself through our people, our domestic mill relationships, and our relentless focus on delivering unmatched customer service. Against the backdrop of tight supply and continuing market volatility, our teams remain nimble in adjusting our approach while prioritizing support for our long-standing customers and their metal needs. The strategic investments we've made across our footprint are generating tangible returns, and our dynamic commercial and operational approach continues to drive the market outperformance and profitability that further distinguish us.

I will now turn the call over to our CFO, Arthur, to review our financial results and outlook.

Arthur Ajemyan

Thanks, Steve, and thanks, everyone, for joining today's call.

We delivered a very strong quarter with sales up 43% year-over-year, driven by better-than-anticipated shipments and pricing. As a result, non-GAAP earnings per diluted share of $8.02 significantly exceeded our guidance range of $6.40 to $6.60 despite considerably higher-than-anticipated LIFO expense. On a per share basis, LIFO expense was $2.74 compared to the $1.10 included in our guidance, representing an incremental $1.64 per share headwind. We generated our second highest quarterly gross profit of $1.5 billion, up 12% compared to the second quarter of 2026 and up 41% compared to the third quarter of 2025.

Gross profit margin of 27.9% decreased 20 basis points sequentially due to increased LIFO expense associated with carbon steel costs rising significantly more than anticipated and the product mix impact of the U.S. border wall project.

On a FIFO basis, non-GAAP gross profit margin expanded to 31.6% compared to 30.5% in the second quarter of 2026 and 29% in the prior year quarter despite a roughly 60 basis point year-over-year reduction attributable to the U.S. border wall project. However, due to the project's below-company-average operating cost per ton profile, it added 40 basis points to pretax income margin. Gross profit dollars per ton remained historically strong for aluminum products and continue to increase across carbon and stainless steel products.

With respect to LIFO outlook and true-up, we increased our full year LIFO expense outlook to $450 million from our prior year estimate of $300 million and recorded third quarter LIFO expense of $187.5 million, well above our estimate of $75 million, reflecting the year-to-date catch-up impact of our higher full year LIFO estimate. Based on our updated outlook, we expect to record LIFO expense of $112.5 million in the fourth quarter of 2026.

At the end of the third quarter, the LIFO reserve on our balance sheet was nearly $890 million, which remains available to support future operating results by partially mitigating the impact of future metal price declines.

Non-GAAP SG&A expense increased 18% compared to the third quarter of 2025, driven by higher incentive compensation from improved profitability, inflationary impact on compensation and related employee benefits, freight and fuel cost inflation and higher variable warehousing and delivery costs associated with our increased tons sold. On a per ton basis, non-GAAP SG&A expense increased just 2%, reflecting favorable operating leverage from higher shipment volumes, including contributions from the U.S. border wall project. Continued market share gains, higher shipment volumes, and increased gross profit dollars drove meaningful operating leverage, resulting in non-GAAP pretax income of $544 million, more than double the prior year amount.

As noted, our non-GAAP earnings per diluted share grew 120% year-over-year to $8.02, with the U.S. border wall project contributing $0.74 per share, exceeding our expectation of approximately $0.60 per share.

Moving on to our balance sheet and cash flow. Cash flow from operations in the third quarter improved sequentially to $212 million, despite a significant working capital build attributable to increased shipments and higher metal pricing. Our total debt was $1.6 billion at the end of the quarter. Our balance sheet and leverage profile remained very strong with a net debt-to-EBITDA ratio of 0.8x, providing substantial liquidity and flexibility to continue executing on all of our capital allocation priorities.

Looking ahead to the fourth quarter, we expect healthy demand and tight supply across our key products and end markets will continue, subject to ongoing risks from domestic and international trade policy and geopolitical conditions as well as normal seasonality. We anticipate fourth quarter 2026 non-GAAP earnings per diluted share in the range of $7.40 to $7.60, including an estimated $112.5 million of LIFO expense or about $1.64 per diluted share. This outlook also includes approximately $0.70 of earnings per share from shipments associated with the U.S. border wall project at pretax income margin levels above the company average.

Please refer to our third quarter earnings release for further details on our fourth quarter outlook. This concludes our prepared remarks. Thank you again for your time and participation. And we'll now open the call for your questions. Operator?

Operator

[Operator Instructions]

Our first question today is coming from Katja Jancic from BMO Capital Markets.

分析师问答

Katja Jancic

Starting on the border wall. So it's outperformed expectations on the volume side for this quarter. Can you talk about what's driving that? In other words, is the volume being pulled forward? Or how should we think about it?

Karla Lewis

On the border wall, this is a new project for us. It started -- we started shipping under it in April, and the government issues -- we have to first rely on our suppliers who are supporting us to ship the metal to us, and then we release to the government subcontractors as they instruct us to do so. And there could be variability, of course, but it really ramped, and we feel we're at a pretty steady flow now through Q3 where we had a full quarter. So we're just supplying and the subcontractors, everything has been flowing well. We haven't seen any major disruptions. So we think this is a good run rate for us based upon the contract and the activity under the contract.

Katja Jancic

And then you mentioned some supply constraints that the industry is dealing with right now. Are there specific products that are more challenging to get for you or you can get across the board without major issues?

Karla Lewis

Yes. I mean I think the whole industry supply is tight in many products. Steve will speak a little more specifically on where we're seeing more tightness than others. But that's generally good market environment for Reliance, as I think you saw in our results and our outlook. And our people are working really hard to source the metal that our customers need and make sure we're taking care of our longtime, valued customers, also appropriately allocating our metal the way that our suppliers are doing with their customers.

Stephen Koch

Yes, Katja, I just want to go back to your question regarding the border wall. In this time of real tightness and unprecedented demand, I have to complement our domestic suppliers who are using their flat-rolled material, turning it into a tube, so we can deliver on time and maybe even ahead of schedule. So there are some carbon products that are constrained, but we're getting what we need: Carbon plate, hot-rolled coil and specialty wide flange beams, and aluminum plate heat treated. It goes into aerospace, and semiconductor and general engineering has been tight. But again, our domestic suppliers have done a great job for us.

Operator

Next question is coming from Nick Cash from Goldman Sachs.

Nicklaus Cash

On the ex-border wall shipments of 4% to 6% year-over-year, a lot of you guys have also mentioned customer optimism across a majority of end markets. As you look into '27, should we think about this pace of organic growth continuing to outpace the industry by several points? Or I guess, are current levels benefiting from unusually tight supply and elevated project activity resulting in further tailwinds for you guys?

Karla Lewis

Nick, a little difficult given all the varying factors to look out that far. And we have had very strong organic growth, I think, partly because of where we're positioned with the different products, the different end markets and even within the broad end markets, specifically which parts of those end markets that we participate in.

And given the customer optimism, their backlogs that we're hearing about, we expect demand to remain healthy. Organic growth, though, could be tempered by supply availability next year given tight supply, although we do feel that we will -- that we should be able to get enough supply from the producers to be able to continue to outpace the industry, but we do have some pretty high hurdles to compare to next year. But we think there's still a lot of opportunity for Reliance, and we think that our teams in the field, they're motivated, they like to grow, and they like to win, and we think we'll continue to see market share gains.

Nicklaus Cash

That's extremely helpful. And I guess, one more follow-up sort of [ involvement ] on that basis. But I guess the border wall project is gross margin dilutive, but pretax margin accretive, like you said, because the operating cost per ton is below the company average. Are you able to help quantify or help us understand the underlying SG&A leverage, excluding the project, I guess, how much additional leverage is available if organic shipments continue to improve?

Arthur Ajemyan

Yes, Nick, it would be a little difficult because we're using existing infrastructure. Yes, but the contributions are only -- to SG&A leverage is meaningful from that project. And I mean, I think you can make some certain deductions from the disclosures that we've provided to come up with an estimate on your own, but certainly, it's a meaningful contribution.

Karla Lewis

And I think, Nick, even in 2025 and the beginning of 2026, as we were organically growing our tons, you could see some leverage that we were picking up before we had the additional border wall tons on the SG&A line. But there are some factors from an SG&A perspective, which we've got higher incentive compensation expense because our profitability is higher. And we're highly structured to be paid for performance. And so we're seeing increased expense there. And then also with the significant increases in freight and fuel cost and just regular inflation on medical costs and things like that, we're trying to offset that with some of those volume gains.

Operator

Your next question today is coming from Martin Englert from Seaport Research Partners.

Martin Englert

I had a question. I think the volume guide for 4Q implied something at the midpoint around sequential, and that roughly seems to align with the 5-year average. Are there any indications from customers that there could be a more muted seasonal decline this 4Q versus a normal year?

Karla Lewis

I mean I think given the strength of the market and the customer optimism, we just talked about, Martin, I think if metal's available, that is -- there is potential if our customers are busier. As we've talked about, I think, every year in the fourth quarter, we're never certain how long some of our customers are going to shut down over the holidays. So if they choose to stay open more days than they have the last few years, we might see a more muted shipment level. But our best estimate at this time is generally normal seasonality.

Arthur Ajemyan

And Martin, and when we talk volumes, we often lead with sequential numbers and in 3 out of 4 quarters, it's a downward trend, but what gets lost is the year-over-year growth. So when you, sort of, step back and look at year-over-year growth, Q4 of this year versus last, you're looking at 5%-plus growth. So I think that's the lens that I would use to look at this and not so much the sequential decline, and is that seasonality or not? I just -- fourth quarter has less shipping days and more holidays. So you're always going to have a decline. So anyway, I think we're more focused on the year-over-year growth part.

Martin Englert

Okay. That's all I had. Congratulations on the results.

Operator

Your next question is coming from Samuel McKinney from KeyBanc Capital Markets.

Samuel McKinney

I'm going to follow up on Nick's question. Just fighting the inflationary headwinds, the third quarter SG&A as a percent of sales was the lowest quarterly number you posted in 4 years. Is this solely a function of the lower cost to serve on the border wall contract that saw higher volumes this quarter? Or are you realizing other operational cost benefits within the business to highlight?

Arthur Ajemyan

Well, pricing is a big part of that, right? So when you look at it as a percentage of sales as a business, we get tremendous operating leverage when we sell at higher prices. So that's one. And then to the extent that we leverage our infrastructure and increase our volumes without adding too much incremental fixed costs, then that's where we get that operating leverage from incremental volumes. So it's a combination. So you have both of those factors playing out and supporting the improvement in the operating leverage that the business is getting.

Samuel McKinney

Okay. And then based on the reported commodity revenues and volumes, third quarter implied stainless pricing was up meaningfully versus the second quarter. Can you just talk about those dynamics and what you expect to see in that arena moving forward.

Arthur Ajemyan

Stainless, there's a little bit of a mix impact there. We have our semiconductor business is picking up, and the products that they sell, the average selling price is significantly higher just because of the value-added processing that we do there. But yes, overall, I mean, stainless is across the commodities hasn't been -- has not had similar types of price appreciation as carbon and aluminum.

Stephen Koch

Although we're seeing the commodity stainless prices kind of hold their own and the specialty stainless grades, we think that they've hit the bottom, and we're in the restocking for our customer base.

Operator

[Operator Instructions]

Our next question today is coming from Bennett Moore from JPMorgan.

Bennett Moore

Congrats on the strong quarter. Just in, I guess, the context of the border wall contract, I'm wondering what your appetite is to pursue similar opportunities, and frankly, if there are similar opportunities out there that could align with this?

Karla Lewis

Bennett, the border wall project is larger than anything we've seen before. I don't know of many other projects of that size for service center-type business that are out there. We're very happy that we were awarded this contract, and it fit our profile of the capabilities we have, along with kind of our financial metric profile that it was -- we looked at it as a very strong piece of business for Reliance to be able to service, and we would look at other opportunities the same way.

It's not just about size, it's about what do they need? Can we service that well? The border wall, as we mentioned, we were able to leverage our existing infrastructure. We do service various different types of projects out there, including a lot on the military side, and we continue to look at those opportunities as they're available. And we certainly would do more business like this if the opportunities were there, and the profile fit.

Bennett Moore

And then on the inventory side, it looks like the turn rose a bit for this quarter, got some limited availability from your mill suppliers. Just wondering if you could speak to the company's inventory positioning looking ahead here.

Karla Lewis

Yes. I mean, we feel good about where our inventory levels are. We always are focused on turning our inventory, and there has been a focus over the last couple of years, too, of really looking at any inventory that's maybe been where we've been a little over-inventoried and how to adjust that. But certainly, a tight market helps improve inventory turns, but we're comfortable at the levels where we are.

Stephen Koch

Yes. As lead times are extended, we're keeping a close eye. We're making sure that we're not over-ordering, double ordering. Prices are at pretty high levels. So we're going to keep our conservative nature, continue to buy locally, buy regionally, and buy what we need to, trying to match customer demand.

Arthur Ajemyan

And just a little bit more color on overall working capital. I mean, while the total dollars, the investments in working capital, have been significant this year, our working capital metrics actually have improved year-over-year, and particularly on inventory to Karla's and Steve's point, our turns are up 10% year-over-year, and that's a meaningful impact to working capital investments. So to put it another way, our inventory levels would have been over $300 million more had we not had the inventory turn and working capital metric improvements that we've had this year. So a lot of good work has gone on that end throughout the entire enterprise.

Bennett Moore

That's a great context, Arthur. And then if I could just squeeze one real quick. You guys talked about rising pricing for most carbon steel products. So just kind of wondering which buckets may be lagging behind a bit.

Stephen Koch

Most -- or pretty much all of the carbon requests are moving up. So just some -- maybe a little bit outsized compared to others. But we're pretty bullish and positive on the carbon products.

Operator

Your next question is coming from Lawson Winder from Bank of America.

Lawson Winder

Thank you for today's presentation and of course, for fitting me in. If I could just follow up on the border wall question. Thank you for the color around that and the fact that you believe it is starting to hit its run rate. What about sustainability? How should we think about how long that business can sustain those Q3 run rate?

Karla Lewis

So as we mentioned and when we first announced the border wall project earlier this year, there was Phase 1 of the border wall which the award was on -- based on dollar amounts and these are fully approved funding levels by the government. Phase 1 was $1.45 billion, which we are executing under right now. The initial expectation was for that to run through Q2 2027. And at the run rate we're at, we think sometime in Q2, we'll fulfill the first phase of this.

The second phase of the project was $800 million, but that had not been secured or fully executed at the time, although we have felt that the probability is high, is that the government would execute Phase 2. And we have -- although still in progress, we have started to receive bookings under Phase 2, so we're at over half of the estimated $800 million Phase 2 with orders already secured for over half of that. So we think this should run through 2027, depending if they execute the full amount of Phase 2, it could run into early 2028.

Arthur Ajemyan

And just a little bit more color on Phase 1, as Karla said. So when you look at year-to-date through Q3 and factor in our Q4 guide for the border wall contributions that will probably put us roughly halfway through the Phase 1 And again, depending on the run rate and how fast the supply chain is able to absorb the quantities and install at that run rate that takes us through a mid-2027-ish to wrap up Phase I.

Lawson Winder

Okay. Wow, first of all, yes, that's very helpful. Just following up on a comment, sort of, tangentially picking up on something you said there. So obviously, the border wall, that all has to be American-made steel. But I mean given the supply constraints that you're seeing in the market, is there an increasing propensity to consider imported steel for those customers where made in America isn't necessarily a requirement?

Stephen Koch

So we've always tried to buy the majority of our material domestically for reason we want to support U.S. manufacturing. We want to be able to control our inventory lead times. There are some traditional import markets, the West Coast on flat-rolled, the Gulf region, we've brought some material in, whether it's long products or flat rolled. There are opportunities out there, but we're all in with our domestic suppliers. We work with them side by side, and we're going to continue with our business model. There are certain areas where we do have to bring in certain materials, but we're going to kind of stay the course.

Karla Lewis

And I think, Lawson, on a broader industry perspective, while you can just look at the price and see the numbers and maybe say it would make sense to start to see a lot more import come in. I think industry-wide people are more hesitant to do that. There's risk with the time involved, there are a lot of higher costs for freight right now, uncertainty because of some of the events going on in the world. So we believe people are being more thoughtful and that there will be some import material brought in, including by us, as Steve said, but we don't believe that the market is ripe for a flood of inventory at this point.

Lawson Winder

Thank you very much for that color. And then if I could just follow up on one, sort of, bigger question. So you continue to highlight market share gains. I mean, it's core to your strategy. But nevertheless, I think it just might be helpful to get your thoughts on specifically where you're seeing those gains in 2026. And then why in 2026 is Reliance winning share?

Karla Lewis

Well, I think, Lawson, 2025, we had some pretty outsized share gains as well. There are pockets I think on a lot on the carbon side, carbon flat-rolled, also in some of the other commodities from a flat-rolled perspective. Historically, we had been a little underrepresented in some of those markets compared to industry consumption. So we saw some pickup there, but fairly broad-based, especially like I said, on the carbon side, plate, long products, really just encouraging our teams. And it's not just about tons gains, it's also balancing with the profitability and going after the right pieces of business.

And we think our teams have been doing a very good job of balancing that. And we hope that we're winning business because of our high levels of customer service and really being able to provide solutions to our customers and helping them.

Operator

We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Karla Lewis

Once again, we would like to thank everyone for joining us today and continuing to support Reliance. As we mentioned earlier, we're very thankful to our teams across Reliance, all of our Reliance family members who make it happen every day and keep our people safe. We appreciate all of your efforts. And we're excited about the opportunities ahead, and we look forward to updating you on our continued progress. So thanks, everyone, and goodbye.

Operator

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.

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