Question-and-Answer Session
Operator: The floor is now open for questions. The first question from Brett Levy.
Brett Levy - Jefferies & Company
Pro forma for PNA. Can you guys talk about where you sit right now in terms of distribution, both on a revenue basis and talk a little bit about where you are in inventory right now, aluminum, stainless, carbon and then within carbon, kind of the percentages that you have that are exposed to sheet and other products.
David Hannah
I think with respect to where we are in the industry, I think was the first part of your question. Does that mean like what percent of the total industry are we looking at?
Brett Levy - Jefferies & Company
No. What exactly what portion of revenue comes from aluminum, stainless and carbon.
Karla Lewis
Okay.
Brett Levy - Jefferies & Company
And then also talk about your inventory positions in all of the above within a special focus in carbon where, I think you have very little in the way of sheet product.
David Hannah
Our carbon steel for the third quarter and now, keep in mind, this has two months only of the PNA business which is a little more carbon. But our carbon sales in the first -- I mean in the third quarter were 60% of our revenue dollars; aluminum was 14%; stainless steel was 12%; alloys were 8%; and then toll processing was 2%; and the other 4% was miscellaneous, and that includes some titanium and some copper and brass.
In terms of how much of that is carbon sheet, Karla's got that, I think.
Karla Lewis
That's 12% per sheet with about 6% of that hot rolled, and then the rest in cold rolled.
Gregg Mollins
Cold rolled and the government.
Brett Levy - Jefferies & Company
And then, how do you look going into the fourth quarter? Do you feel like your inventories are heavier than that or lighter than that as you position yourself?
Gregg Mollins
I think our inventories are pretty much in proportion to where they should be. We've been talking, however, about reducing inventories and we fully expect that inventories will be reduced materially during the fourth quarter. That's a normal seasonal thing for us. We usually reduce inventories in the fourth quarter.
But this year with the tail-off somewhat of business that we saw in September, we expect that to continue through the fourth quarter. Therefore, we expect inventories to come down even more than what we would bring them down normally. Overall, I think right today we have about 2.8 months of inventory on hand, somewhere in there, 2.7, 2.8. So we're not uncomfortable. We just want it lower.
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