The Company provides metals processing, distribution and delivery of large volumes of processed carbon, coated flat-rolled sheet, coil and plate products, aluminum, and stainless flat-rolled products, prime tin mill products, flat bar products, metal tubing, pipe, bar, valves, fittings, fabricated parts, venting, micro air and clean air products. The Company's contracts with customers are comprised of purchase orders with standard terms and conditions. Occasionally the Company made an out-of-period adjustment to correct and record previously unrecognized deferred tax assets, andmay also have longer-term agreements with customers. Substantially all of the associated tax benefit, relatedcontracts with customers require the delivery of metals, which represent single performance obligations that are satisfied at a point in time upon transfer of control of the product to the supplemental executive retirement plan (SERP). The adjustment, which had accumulated sincecustomer.

Transfer of control is assessed based on the inceptionuse of the plan in 2005, resulted in an increaseproduct distributed and rights to after-tax incomepayment for performance under the contract terms. Transfer of $1.9 million incontrol and revenue recognition for substantially all of the first quarterCompany’s sales occur upon shipment or delivery of 2017.the product, which is when title, ownership and risk of loss pass to the customer and is based on the applicable shipping terms. The shipping terms depend on the customer contract. An invoice for payment is issued at time of shipment and terms are generally net 30 days. The Company determined that this adjustment was has certain fabrication contracts in one business unit for which revenue is recognized over time as performance obligations are achieved. This fabrication business is not material to its current or prior periodthe Company's consolidated financial statements.results.

Within the metals industry, revenue is frequently disaggregated by products sold. The table below disaggregates the Company’s revenues by segment and products sold.

Accounts receivable are presented net of allowances for doubtful accountscredit losses and unissued credits of $3.2$3.6 million and $2.4$4.2 million as of September 30, 2017March 31, 2024 and December 31, 2016,2023, respectively. The allowance for doubtful accountscredit losses is maintained at a level considered appropriate based on historical experience, and specific customer collection issues that have been identified.identified, current market conditions and estimates for supportable forecasts when appropriate. Estimations are based upon a calculated percentage of accounts receivable, which remains fairly level from year to year, and judgments about the probable effects of economic conditions on certain customers, which can fluctuate significantly from year to year. The Company cannot guarantee that the rate of future credit losses will be similar to past experience. The Company considers all available information when assessing the adequacy of its allowance for doubtful accountscredit losses and unissued credits each quarter.credits.

Inventories consisted of the following:

The Company values certain of its tubular and pipe products inventory at the last-in, first-outfirst-out (LIFO) method. At September 30, 2017As of March 31, 2024 and December 31, 2016,2023, approximately $50.5$37.1 million, or 18.0%9.3% of consolidated inventory, and $43.4$38.2 million, or 17.1%9.9% of consolidated inventory, respectively, was reported under the LIFO method of accounting. The cost of the remainder of the tubular and pipe products inventory is determined using a weighted average rolling first-in, first-outfirst-in, first-out (FIFO) method.

During the three and nine months ended September 30, 2017,March 31, 2024, the Company recorded $0.7 million and $1.5$0.4 million of LIFO expense. The Company did not record LIFO expense respectively, asor income during the current projections anticipate increased pricing and volume of LIFO inventory for the remainder of the year. During the three and nine months ended September 30, 2016, the Company recorded $0.7 million of LIFO income.March 31, 2023.

If the FIFO method had been in use, inventories would have been $6.6$12.4 million lowerhigher than reported as of March 31, 2024 and $12.0 million higher than reported at September 30, 2017 and $8.0 million lower than reported at December 31, 2016.2023.

During the second quarter of 2017, the Company began actively marketing for sale certain property at the flat product segment’s Siler City, North Carolina facility. As a result of that decision, the Company reclassified $0.8 million of net book value related to that property along with certain machinery and equipment as assets held for sale in the Consolidated Balance Sheets. The sale of those assets is expected to be completed within the next twelve months and are presented as current. Based on the present real estate market and discussions with the Company’s real estate adviser, no impairment of the recorded amounts has occurred as of September 30, 2017.

The Company's intangible assets were recorded in connection with its acquisitions of Metal-Fab and CTB in 2023, Shaw Stainless & Alloy, Inc. (Shaw) in 2021, Action Stainless & Alloys, Inc. (Action Stainless) in 2020, EZ Dumper® hydraulic dump inserts (EZ Dumper) and McCullough Industries (McCullough) in 2019, Berlin Metals, LLC (Berlin Metals) in 2018 and Chicago Tube and Iron (CTI) in 2011. The intangible assets were evaluated on the premise of highest and best use to a market participant, primarily utilizing the income approach valuation methodology.

Goodwill, by reportable unit, was as follows as of March 31, 2024 and December 31, 2023, respectively. The goodwill is deductible for tax purposes.

Intangible assets, net, consisted of the following as of March 31, 2024 and December 31, 2023, respectively:

The Company’s estimates that amortization expense for its intangible assets subject to amortization will be approximately $4.3 million per year for the next two years, $3.8 million the following year and then $3.3 million and $3.0 million, respectively, over the next two years.

The components of lease expense were as follows:

The Company’s debt is comprised of the following components:

The Company’s asset-based credit facility (theCompany's ABL Credit Facility)Facility is collateralized by the Company’sCompany's accounts receivable, inventory and inventory.personal property. The$625 million ABL Credit Facility consists of: (i) a revolving credit facility of up to $595 million, including a $20 million sub-limit for letters of credit, and (ii) a first in, last out revolving credit facility of up to $30 million. Under the terms of the ABL Credit Facility, consiststhe Company may, subject to the satisfaction of acertain conditions, request additional commitments under the revolving credit linefacility in the aggregate principal amount of $365 million. Revolver borrowings are limitedup to $200 million to the lesser of a borrowing base, comprised of eligible receivablesextent that existing or new lenders agree to provide such additional commitments, and inventories, or $365 million inadd real estate as collateral at the aggregate.Company’s discretion. The ABL Credit Facility matures on June 30, 2019.16, 2026.

The ABL Credit Facility requirescontains customary representations and warranties and certain covenants that limit the ability of the Company to, complyamong other things: (i) incur or guarantee additional indebtedness; (ii) pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt; (iii) make investments; (iv) sell assets; (v) enter into agreements that restrict distributions or other payments from restricted subsidiaries to the Company; (vi) incur liens securing indebtedness; (vii) consolidate, merge or transfer all or substantially all of the Company’s assets; and (viii) engage in transactions with various covenants, the most significant of which include: (i) until maturity ofaffiliates. In addition, the ABL Credit Facility contains a financial covenant which requires if any commitments or obligations are outstanding and the Company’sCompany’s availability is less than the greater of $30 million or 10.0% of the aggregate amount of revolver commitments ($36.562.5 million at September 30, 2017)March 31, 2024) or 10.0% of the aggregate borrowing base ($56.8 million at March 31, 2024), then the Company must maintain a ratio of EBITDAEarnings before Interest, Taxes, Depreciation and Amortization (EBITDA) minus certain capital expenditures and cash taxes paid to fixed charges of at least 1.00 to 1.00 for the most recent recent twelve fiscal month period; (ii) limitations on dividend paymentsperiod.

As of March 31, 2024, the Company was in compliance with its covenants and common stock repurchases; and (iii) restrictions on additional indebtedness. had approximately $366 million of availability under the ABL Credit Facility.

The Company has the option to borrow under its revolver based on the agent’s base rate plus a premium ranging from 0.00% to 0.25% or the London Interbank OfferedSecured Overnight Financing Rate (LIBOR)(SOFR) plus a premium ranging from from 1.25% to 3.00%2.75%.

As of September 30, 2017, the Company was in compliance with its covenantsMarch 31, 2024 and had approximately $110December 31, 2023, $1.6 million of availability under the ABL Credit Facility.

As of September 30, 2017, $1.4 and $1.7 million, respectively, of bank financing fees were included in “Prepaid expenses and other” and “Other long-term assets” on the accompanying Consolidated Balance Sheets. The financing fees are being amortized over the five-yearfive-year term of the ABL Credit facilityFacility and are included in “Interest and other expense on debt” on the accompanying Consolidated Statements of Comprehensive Income.

As part of the CTI acquisition in July 2011, the Company assumed approximately $5.9 million of Industrial Revenue Bond (IRB) indebtedness issued through the Stanly County, North Carolina Industrial Revenue and Pollution Control Authority. The bond matures in April 2018, with the option to provide principal payments annually in April. On April 3, 2017, the Company paid an optional principal payment of $0.9 million. The remaining balance of the IRB is included in “Current portion of long-term debt” on the accompanying Consolidated Balance Sheets as the payment is due in April 2018. Interest is payable monthly, with a variable rate that resets weekly. As a security for payment of the bonds, the Company obtained a direct pay letter of credit issued by JPMorgan Chase Bank, N.A. The letter of credit reduces annually by the principal reduction amount. The interest rate at September 30, 2017 was 0.9% for the IRB debt.

CTI entered into an interest rate swap agreement to reduce the impact of changes in interest rates on the IRB. At September 30, 2017, the effect of the swap agreement on the bond was to fix the rate at 3.46%. The swap agreement matures in April 2018, and is reduced annually by the amount of the optional principal payments on the bond. The Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement. However, the Company does not anticipate nonperformance by the counterparties.

Metals swaps and embedded customer derivatives

During 2017During 2024 and 2016,2023, the CompanyCompany entered into nickel swaps indexed to the London Metal Exchange (LME) price of nickel with third-partythird-party brokers. The nickel swaps are accounted for as derivatives for accounting purposes. The Company entered into them to mitigate its customers’customers’ risk of volatility in the price of metals. The outstanding nickel swaps mature in 2017 and 2018.2024. The swaps are settled with the brokers at maturity. The economic benefit or loss arising from the changes in fair value of the swaps is contractually passed through to the customer. The primary risk associated with the metals swaps is the ability of customers or third-partythird-party brokers to honor their agreements with the Company related to derivative instruments. If the customer or third-partythird-party brokers are unable to honor their agreements, the Company’s risk of loss is the fair value of the metals swaps.

While theseThese derivatives are intended to help the Company manage risk, they have not been designated as hedging instruments. The periodic changes in fair value of the metals and embedded customer derivative instruments are included in “Cost of materials sold” in the Consolidated Statements of Comprehensive Income. The Company recognizes derivative positions with both the customer and the third party for the derivatives and classifies cash settlement amounts associated with them as part of “Cost of materials sold” in the Consolidated Statements of Comprehensive Income. The cumulative change in fair value of the metals swaps that have had not yet been settled as of March 31, 2024, are included in “Other accrued liabilities” and the embedded customer derivatives are included in “Other accrued liabilities”, and “Accounts receivable, net” on the Consolidated Balance Sheets at September 30, 2017 and Decemberas of March 31, 2016.

Interest rate swap

CTI entered into an interest rate swap to reduce the impact of changes in interest rates on its IRB. The swap agreement matures in April 2018, the same time as the IRB, and is reduced annually by the amount of the optional principal payments on the IRB. The Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement. However, the Company does not anticipate nonperformance by the counterparties. The interest rate swap is not treated as a hedge for accounting purposes.

The periodic changes in fair value of the interest rate swap and cash settlement amounts associated with the interest rate swap are included in “Interest and other expense on debt” in the Consolidated Statements of Comprehensive Income.2024.  

Fixed rate interest rate hedge

In June 2012,On January 10, 2019, the Company entered into afive-year forward starting fixed rate interest rate hedge commencing June 2013 in order to eliminate the variability of cash interest payments on $53.2$75 million of the then outstanding LIBOR-basedLIBOR based borrowings under the ABL Credit Facility. The hedge, which matured on June 1, 2016, fixedJanuary 3, 2023, the rate at 1.21% plus a premium ranging from 1.25% to 1.75%. The fixed rateCompany amended the interest rate hedge was accounted foragreement to use SOFR as a cash flow hedging instrument for accounting purposes.the reference rate and updated the fixed rate to 2.42% from 2.57%. The interest rate hedge agreement ended on January 10, 2024.

There was no net impact from the nickel swaps or embedded customer derivative agreements to the Company’s Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016. The table below shows the total impact to the Company’s Consolidated Statements of Comprehensive Income through net income of the derivatives for the three and nine months ended September 30, 2017 March 31, 2024 and 2016.2023, respectively.

During the three months ended September 30, 2017,March 31, 2024, there were no transfers of financial assets between Levels 1,2 or 3 fair value measurements. There have been no changes in the methodologies used at September 30, 2017as of March 31, 2024 since December 31, 2016. Following is a description of the valuation methodologies used for assets and liabilities measured at fair value as of September 30, 2017 and December 31, 2016:

Metals swaps and embedded customer derivatives – Determined by using Level 2 inputs that include the price of nickel indexed to the LME. The fair value is determined based on quoted market prices and reflects the estimated amounts the Company would pay or receive to terminate the nickel swaps.

Interest rate swaps – Based on the present value of the expected future cash flows, considering the risks involved, and using discount rates appropriate for the maturity date. Market observable Level 2 inputs are used to determine the present value of future cash flows.2023.

The following table presents information about the Company’sCompany’s assets and liabilities that were measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company:

The value of the items not recorded at fair value represent the carrying value of the liabilities.