- Third quarter net earnings of $234.0
million, or $1.98 per diluted
share, increased 30% from the previous quarter
- Core EBITDA of $391.7 million
increased 29% sequentially
- North America segment
adjusted EBITDA grew sequentially and year-over-year, driven by
strong business activity and ongoing cost improvement
- North America new project
bid volumes increased by a double-digit percentage vs. prior year,
signaling continued strength in construction pipeline
- Volume and value of North
America downstream backlog remained near all-time
highs
- Operational startup of Arizona 2 micro mill underway
IRVING,
Texas, June 22, 2023 /PRNewswire/ -- Commercial
Metals Company (NYSE: CMC) today announced financial results for
its fiscal third quarter ended May 31, 2023. Net
earnings were $234.0 million, or
$1.98 per diluted share, on net sales
of $2.3 billion, compared to prior
year period net earnings of $312.4
million, or $2.54 per diluted
share, on net sales of $2.5
billion.
During the third quarter of fiscal 2023, the Company recorded a
net after-tax charge of $5.8 million
related to the commissioning of the Arizona 2 micro mill. Excluding this
item, third quarter adjusted earnings were $239.7 million, or $2.02 per diluted share, compared to adjusted
earnings of $320.2 million, or
$2.61 per diluted share, in the prior
year period. "Adjusted EBITDA," "core EBITDA," "adjusted earnings"
and "adjusted earnings per diluted share" are non-GAAP financial
measures. Details, including a reconciliation of each such non-GAAP
financial measure to the most directly comparable measure prepared
and presented in accordance with GAAP, can be found in the
financial tables that follow.
Barbara R. Smith, Chairman of the
Board and Chief Executive Officer, said, "CMC delivered strong
third quarter financial results, benefiting from robust North
American construction activity, good product margins in the
domestic market, and success in our continued efforts to reduce
controllable costs. Our North America segment achieved EBITDA
growth both sequentially and year-over-year, demonstrating the
resilience of CMC's business and the strength of our end
markets. During the third quarter, North American segment
volumes were supported by significant structural trends, including
the re-shoring of manufacturing and logistical supply chains, and
increasing investment to improve the condition and functionality of
our nation's core infrastructure and energy markets. We
expect increased activity in these rebar-intensive construction
sectors will continue to drive demand in the quarters and years
ahead."
Ms. Smith continued, "I am also extremely encouraged by the
progress we have made on our commissioning of operations at CMC's
Arizona 2 project.
Operations are starting at an ideal time to capitalize on growing
construction activity related to the Infrastructure Investment and
Jobs Act, re-shoring, and the Inflation Reduction Act. We
expect this project, together with our Tensar platform and other strategic initiatives,
will provide a significant source of earnings and cash flow growth
and generate meaningful value for our shareholders."
The Company's balance sheet and liquidity position remained
strong as of May 31, 2023. Cash and cash equivalents
totaled $475.5 million, with
available liquidity of $1.4
billion. During the quarter, CMC repaid $214.1 million in senior notes that matured in
May, and repurchased 352,000 shares of common stock valued at
$16.5 million. As of
May 31, 2023, $105.3 million
remained available under the current share repurchase
authorization.
On June 21, 2023, the board of
directors declared a quarterly dividend of $0.16 per share of CMC common stock payable to
stockholders of record on July 3, 2023. The dividend to be
paid on July 12, 2023, marks the 235th
consecutive quarterly payment by the Company, and represents
a 14% increase from the dividend paid in July 2022.
Business Segments - Fiscal Third Quarter 2023 Review
Demand for CMC's finished steel products in North America remained healthy during the
quarter. Downstream bid volumes, a significant indicator of
the construction project pipeline, improved from a year ago,
resulting in an expansion of the Company's contract backlog value
compared to the prior year period. Demand from industrial end
markets, which is important for merchant products, was stable on
both a sequential and year-over-year basis.
The North America segment
reported adjusted EBITDA of $402.2
million for the third quarter of fiscal 2023, in comparison
to $379.4 million in the prior year
period, representing a 6% increase. Financial results for the
period mark the tenth consecutive quarter of year-over-year growth
in adjusted EBITDA, excluding the large gain on the sale of real
estate recognized in the second quarter of fiscal 2022. The
improvement was driven by expanded margins over scrap cost on
downstream products. Controllable costs per ton of finished
steel increased from the prior year period by approximately 6%,
primarily due to general inflationary pressures. However, in
comparison to the second quarter of fiscal 2023, controllable costs
decreased meaningfully primarily due to improved fixed cost
leverage on higher volumes, lower per-unit costs for key
consumables, and a lower cost burden related to major planned
maintenance outages.
Shipment volumes of finished steel, which include steel products
and downstream products, were relatively unchanged from the prior
year period. The average selling price for steel products decreased
by $131 per ton compared to the third
quarter of fiscal 2022, while the cost of scrap utilized declined
$88 per ton, resulting in a
year-over-year decrease of $43 per
ton in steel products margin over scrap. The average selling
price for downstream products increased by $208 per ton from the prior year period and
$34 per ton on a sequential quarter
basis.
Europe end market conditions
softened during the quarter, as Polish construction activity
decelerated, and industrial production across Central Europe remained muted. The
Europe segment reported adjusted
EBITDA of $9.6 million for the third
quarter of fiscal 2023, compared to the record adjusted EBITDA of
$121.0 million achieved in the prior
year period. The decline was driven by lower margins over
scrap, higher energy costs, and reduced shipment volumes.
The Europe segment's
advantageous cost position and operational flexibility allowed it
to maintain strong shipment levels, despite these market
headwinds. Third quarter volume of 429,000 tons was 10% below
prior year shipment levels, which were positively impacted by heavy
customer buying following the invasion of Ukraine. Average
selling price decreased by $214 per
ton in the third quarter compared to the prior year period, while
the cost of scrap utilized declined $103 per ton. The result was a year-over-year
decline in margin over scrap of $111
per ton. Average selling price and margin over scrap also
decreased on a sequential basis by $3
per ton and $41 per ton,
respectively.
Outlook
Ms. Smith said, "We expect financial performance to remain
strong during the fourth quarter of fiscal 2023. North America finished steel product shipments
are anticipated to be consistent with the third quarter, supported
by healthy end market demand and our historically high downstream
backlog. Margin levels in North
America should be similar to the third quarter.
Results in our Europe segment are
expected to be relatively unchanged from the third quarter,
reflecting continued economic uncertainty. CMC will leverage
its market leading cost position to maintain profitability in
Europe within this challenging
backdrop."
Conference Call
CMC invites you to listen to a live broadcast of its third
quarter fiscal 2023 conference call today, Thursday, June 22,
2023, at 11:00 a.m. ET.
Barbara R. Smith, Chairman of the
Board and Chief Executive Officer, Peter
Matt, President, and Paul
Lawrence, Senior Vice President and Chief Financial Officer,
will host the call. The call is accessible via our website at
www.cmc.com. In the event you are unable to listen to the live
broadcast, the call will be archived and available for replay on
our website on the next business day. Financial and statistical
information presented in the broadcast are located on CMC's website
under "Investors."
About Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture,
recycle and fabricate steel and metal products and provide related
materials and services through a network of facilities that
includes seven electric arc furnace ("EAF") mini mills, two EAF
micro mills, one rerolling mill, steel fabrication and processing
plants, construction-related product warehouses and metal recycling
facilities in the United States
and Poland. Through its
Tensar operations, CMC is a leading
global provider of innovative ground and soil stabilization
solutions selling into more than 80 national markets through two
major product lines: Tensar® geogrids and Geopier® foundation
systems.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the federal securities laws with respect to general
economic conditions, key macro-economic drivers that impact our
business, the effects of ongoing trade actions, the effects of
continued pressure on the liquidity of our customers, potential
synergies and organic growth provided by acquisitions and strategic
investments, demand for our products, shipment volumes, metal
margins, the ability to operate our steel mills at full capacity,
future availability and cost of supplies of raw materials and
energy for our operations, share repurchases, legal proceedings,
construction activity, international trade, the impact of the
Russian invasion of Ukraine,
capital expenditures, tax credits, our liquidity and our ability to
satisfy future liquidity requirements, estimated contractual
obligations, the expected capabilities and benefits of new
facilities, the timeline for execution of our growth plan and our
expectations or beliefs concerning future events. The statements in
this release that are not historical statements, are
forward-looking statements. These forward-looking statements can
generally be identified by phrases such as we or our management
"expects," "anticipates," "believes," "estimates," "future,"
"intends," "may," "plans to," "ought," "could," "will," "should,"
"likely," "appears," "projects," "forecasts," "outlook" or other
similar words or phrases, as well as by discussions of strategy,
plans or intentions.
The Company's forward-looking statements are based on
management's expectations and beliefs as of the time this news
release was prepared. Although we believe that our expectations are
reasonable, we can give no assurance that these expectations will
prove to have been correct, and actual results may vary materially.
Except as required by law, we undertake no obligation to update,
amend or clarify any forward-looking statements to reflect changed
assumptions, the occurrence of anticipated or unanticipated events,
new information or circumstances or any other changes. Important
factors that could cause actual results to differ materially from
our expectations include those described in our filings with the
Securities and Exchange Commission, including, but not limited
to, in Part I, Item 1A, "Risk Factors" of our annual report on
Form 10-K for the fiscal year ended August 31, 2022, and Part
II, Item 1A, "Risk Factors" of our subsequent quarterly reports on
Form 10-Q, as well as the following: changes in economic conditions
which affect demand for our products or construction activity
generally, and the impact of such changes on the highly cyclical
steel industry; rapid and significant changes in the price of
metals, potentially impairing our inventory values due to declines
in commodity prices or reducing the profitability of our downstream
contracts due to rising commodity pricing; excess capacity in our
industry, particularly in China,
and product availability from competing steel mills and other steel
suppliers including import quantities and pricing; the impact of
the Russian invasion of Ukraine on
the global economy, inflation, energy supplies and raw materials;
increased attention to environmental, social and governance ("ESG")
matters, including any targets or other ESG or environmental
justice initiatives; operating and startup risks, as well as market
risks associated with the commissioning of new projects could
prevent us from realizing anticipated benefits and could result in
a loss of all or a substantial part of our investments; impacts
from global public health crises, including the COVID-19 pandemic,
on the economy, demand for our products, global supply chain and on
our operations; compliance with and changes in existing and future
laws, regulations and other legal requirements and judicial
decisions that govern our business, including increased
environmental regulations associated with climate change and
greenhouse gas emissions; involvement in various environmental
matters that may result in fines, penalties or judgments; evolving
remediation technology, changing regulations, possible third-party
contributions, the inherent uncertainties of the estimation process
and other factors that may impact amounts accrued for environmental
liabilities; potential limitations in our or our customers'
abilities to access credit and non-compliance with their
contractual obligations, including payment obligations; activity in
repurchasing shares of our common stock under our share repurchase
program; financial and non-financial covenants and restrictions on
the operation of our business contained in agreements governing our
debt; our ability to successfully identify, consummate and
integrate acquisitions and realize any or all of the anticipated
synergies or other benefits of acquisitions; the effects that
acquisitions may have on our financial leverage; risks associated
with acquisitions generally, such as the inability to obtain, or
delays in obtaining, required approvals under applicable antitrust
legislation and other regulatory and third party consents and
approvals; lower than expected future levels of revenues and
higher than expected future costs; failure or inability to
implement growth strategies in a timely manner; the impact of
goodwill or other indefinite lived intangible asset impairment
charges; the impact of long-lived asset impairment charges;
currency fluctuations; global factors, such as trade measures,
military conflicts and political uncertainties, including changes
to current trade regulations, such as Section 232 trade tariffs and
quotas, tax legislation and other regulations which might adversely
impact our business; availability and pricing of electricity,
electrodes and natural gas for mill operations; our ability to hire
and retain key executives and other employees; competition from
other materials or from competitors that have a lower cost
structure or access to greater financial resources; information
technology interruptions and breaches in security; our ability to
make necessary capital expenditures; availability and pricing of
raw materials and other items over which we exert little influence,
including scrap metal, energy and insurance; unexpected equipment
failures; losses or limited potential gains due to hedging
transactions; litigation claims and settlements, court decisions,
regulatory rulings and legal compliance risks; risk of injury or
death to employees, customers or other visitors to our operations;
and civil unrest, protests and riots.
COMMERCIAL METALS
COMPANY
FINANCIAL &
OPERATING STATISTICS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in thousands,
except per ton amounts)
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
5/31/2023
|
|
5/31/2022
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,987,535
|
|
$
1,640,933
|
|
$
1,816,899
|
|
$
1,997,636
|
|
$
2,033,150
|
|
$
5,445,367
|
|
$
5,300,996
|
Adjusted
EBITDA
|
|
402,175
|
|
299,311
|
|
377,956
|
|
370,516
|
|
379,355
|
|
1,079,442
|
|
1,183,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
409
|
|
321
|
|
316
|
|
359
|
|
353
|
|
1,046
|
|
1,016
|
Rebar
|
|
539
|
|
425
|
|
461
|
|
451
|
|
505
|
|
1,425
|
|
1,354
|
Merchant and
other
|
|
248
|
|
236
|
|
243
|
|
249
|
|
274
|
|
727
|
|
776
|
Steel
products
|
|
787
|
|
661
|
|
704
|
|
700
|
|
779
|
|
2,152
|
|
2,130
|
Downstream
products
|
|
382
|
|
311
|
|
382
|
|
432
|
|
399
|
|
1,075
|
|
1,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
833
|
|
$
868
|
|
$
824
|
|
$
950
|
|
$
1,207
|
|
$
841
|
|
$
1,116
|
Steel
products
|
|
979
|
|
985
|
|
1,020
|
|
1,104
|
|
1,110
|
|
994
|
|
1,045
|
Downstream
products
|
|
1,452
|
|
1,418
|
|
1,399
|
|
1,348
|
|
1,244
|
|
1,424
|
|
1,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of raw materials
per ton
|
|
$
619
|
|
$
639
|
|
$
598
|
|
$
717
|
|
$
908
|
|
$
617
|
|
$
837
|
Cost of ferrous scrap
utilized per ton
|
|
$
384
|
|
$
346
|
|
$
325
|
|
$
387
|
|
$
472
|
|
$
352
|
|
$
446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
595
|
|
$
639
|
|
$
695
|
|
$
717
|
|
$
638
|
|
$
642
|
|
$
599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
353,294
|
|
$
355,633
|
|
$
406,513
|
|
$
412,264
|
|
$
484,564
|
|
$
1,115,440
|
|
$
1,209,378
|
Adjusted
EBITDA
|
|
9,618
|
|
12,949
|
|
64,505
|
|
64,096
|
|
120,974
|
|
87,072
|
|
281,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
146
|
|
183
|
|
204
|
|
177
|
|
170
|
|
533
|
|
445
|
Merchant and
other
|
|
283
|
|
253
|
|
269
|
|
251
|
|
306
|
|
805
|
|
846
|
Steel
products
|
|
429
|
|
436
|
|
473
|
|
428
|
|
476
|
|
1,338
|
|
1,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
products
|
|
$
753
|
|
$
756
|
|
$
792
|
|
$
888
|
|
$
967
|
|
$
768
|
|
$
898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of ferrous scrap
utilized per ton
|
|
$
427
|
|
$
389
|
|
$
366
|
|
$
435
|
|
$
530
|
|
$
395
|
|
$
472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
326
|
|
$
367
|
|
$
426
|
|
$
453
|
|
$
437
|
|
$
373
|
|
$
426
|
COMMERCIAL METALS
COMPANY
BUSINESS SEGMENTS
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
thousands)
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
5/31/2023
|
|
5/31/2022
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$ 1,987,535
|
|
$ 1,640,933
|
|
$ 1,816,899
|
|
$ 1,997,636
|
|
$ 2,033,150
|
|
$ 5,445,367
|
|
$ 5,300,996
|
Europe
|
|
353,294
|
|
355,633
|
|
406,513
|
|
412,264
|
|
484,564
|
|
1,115,440
|
|
1,209,378
|
Corporate and
Other
|
|
4,160
|
|
21,437
|
|
3,901
|
|
(2,835)
|
|
(1,987)
|
|
29,498
|
|
(3,958)
|
Total net
sales
|
|
$ 2,344,989
|
|
$ 2,018,003
|
|
$ 2,227,313
|
|
$ 2,407,065
|
|
$ 2,515,727
|
|
$ 6,590,305
|
|
$ 6,506,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$
402,175
|
|
$
299,311
|
|
$
377,956
|
|
$
370,516
|
|
$
379,355
|
|
$ 1,079,442
|
|
$ 1,183,342
|
Europe
|
|
9,618
|
|
12,949
|
|
64,505
|
|
64,096
|
|
120,974
|
|
87,072
|
|
281,955
|
Corporate and
Other
|
|
(37,715)
|
|
(15,573)
|
|
(39,725)
|
|
(32,227)
|
|
(35,049)
|
|
(93,013)
|
|
(121,876)
|
Total adjusted
EBITDA
|
|
$
374,078
|
|
$
296,687
|
|
$
402,736
|
|
$
402,385
|
|
$
465,280
|
|
$ 1,073,501
|
|
$ 1,343,421
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(in thousands,
except share and per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$ 2,344,989
|
|
$ 2,515,727
|
|
$
6,590,305
|
|
$
6,506,416
|
Costs and operating
expenses (income):
|
|
|
|
|
|
|
|
Cost of goods
sold
|
1,862,299
|
|
1,956,459
|
|
5,203,476
|
|
5,157,834
|
Selling, general and
administrative expenses
|
162,953
|
|
139,556
|
|
469,503
|
|
391,119
|
Interest
expense
|
8,878
|
|
13,433
|
|
31,868
|
|
36,479
|
Asset
impairments
|
1
|
|
3,245
|
|
46
|
|
4,473
|
Loss on debt
extinguishment
|
—
|
|
39
|
|
178
|
|
16,091
|
Loss (gain) on sales
of assets
|
788
|
|
(2,024)
|
|
1,175
|
|
(276,106)
|
|
2,034,919
|
|
2,110,708
|
|
5,706,246
|
|
5,329,890
|
Earnings before income
taxes
|
310,070
|
|
405,019
|
|
884,059
|
|
1,176,526
|
Income taxes
|
76,099
|
|
92,590
|
|
208,465
|
|
247,894
|
Net earnings
|
$
233,971
|
|
$
312,429
|
|
$
675,594
|
|
$
928,632
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.00
|
|
$
2.58
|
|
$
5.76
|
|
$
7.66
|
Diluted
|
$
1.98
|
|
$
2.54
|
|
$
5.69
|
|
$
7.55
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
$
0.16
|
|
$
0.14
|
|
$
0.48
|
|
$
0.42
|
Average basic shares
outstanding
|
117,066,623
|
|
121,247,105
|
|
117,192,710
|
|
121,277,553
|
Average diluted shares
outstanding
|
118,397,899
|
|
122,799,869
|
|
118,747,084
|
|
122,927,291
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except share and per share data)
|
|
May 31,
2023
|
|
August 31,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
475,489
|
|
$
672,596
|
Accounts receivable
(less allowance for doubtful accounts of $4,633 and
$4,990)
|
|
1,244,652
|
|
1,358,907
|
Inventories,
net
|
|
1,145,476
|
|
1,169,696
|
Prepaid and other
current assets
|
|
276,024
|
|
240,269
|
Total current
assets
|
|
3,141,641
|
|
3,441,468
|
Property, plant and
equipment, net
|
|
2,268,150
|
|
1,910,871
|
Intangible assets,
net
|
|
252,260
|
|
257,409
|
Goodwill
|
|
342,109
|
|
249,009
|
Other noncurrent
assets
|
|
516,700
|
|
378,270
|
Total assets
|
|
$
6,520,860
|
|
$
6,237,027
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
382,482
|
|
$
428,055
|
Accrued expenses and
other payables
|
|
414,240
|
|
540,136
|
Current maturities of
long-term debt and short-term borrowings
|
|
56,222
|
|
388,796
|
Total current
liabilities
|
|
852,944
|
|
1,356,987
|
Deferred income
taxes
|
|
310,087
|
|
250,302
|
Other noncurrent
liabilities
|
|
231,321
|
|
230,060
|
Long-term
debt
|
|
1,102,883
|
|
1,113,249
|
Total
liabilities
|
|
2,497,235
|
|
2,950,598
|
Stockholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share; authorized 200,000,000 shares; issued
129,060,664 shares; outstanding 116,863,346 and 117,496,053
shares
|
|
1,290
|
|
1,290
|
Additional paid-in
capital
|
|
385,418
|
|
382,767
|
Accumulated other
comprehensive income (loss)
|
|
54,982
|
|
(114,451)
|
Retained
earnings
|
|
3,931,775
|
|
3,312,438
|
Less treasury stock,
12,197,318 and 11,564,611 shares at cost
|
|
(350,081)
|
|
(295,847)
|
Stockholders'
equity
|
|
4,023,384
|
|
3,286,197
|
Stockholders' equity
attributable to non-controlling interests
|
|
241
|
|
232
|
Total stockholders'
equity
|
|
4,023,625
|
|
3,286,429
|
Total liabilities and
stockholders' equity
|
|
$
6,520,860
|
|
$
6,237,027
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Nine Months Ended
May 31,
|
(in
thousands)
|
|
2023
|
|
2022
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
675,594
|
|
$
928,632
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
157,528
|
|
125,943
|
Stock-based
compensation
|
|
44,000
|
|
37,856
|
Deferred income taxes
and other long-term taxes
|
|
34,815
|
|
64,241
|
Write-down of
inventory
|
|
8,931
|
|
266
|
Net loss (gain) on
sales of assets
|
|
1,175
|
|
(276,106)
|
Loss on debt
extinguishment
|
|
178
|
|
16,052
|
Asset
impairments
|
|
46
|
|
4,473
|
Other
|
|
4,780
|
|
1,183
|
Settlement of New
Markets Tax Credit transaction
|
|
(17,659)
|
|
—
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
25,291
|
|
(660,793)
|
Net cash flows from
operating activities
|
|
934,679
|
|
241,747
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(439,742)
|
|
(294,346)
|
Acquisitions, net of
cash acquired
|
|
(167,069)
|
|
(552,449)
|
Proceeds from
insurance
|
|
2,456
|
|
3,081
|
Proceeds from the sale
of property, plant and equipment and other
|
|
776
|
|
314,971
|
Other
|
|
(1,583)
|
|
—
|
Net cash flows used by
investing activities
|
|
(605,162)
|
|
(528,743)
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Proceeds from issuance
of long-term debt, net
|
|
—
|
|
740,403
|
Repayments of
long-term debt
|
|
(380,700)
|
|
(319,706)
|
Debt issuance
costs
|
|
(1,800)
|
|
(3,064)
|
Debt extinguishment
costs
|
|
(96)
|
|
(13,642)
|
Proceeds from accounts
receivable facilities
|
|
242,408
|
|
327,665
|
Repayments under
accounts receivable facilities
|
|
(244,105)
|
|
(290,666)
|
Treasury stock
acquired
|
|
(82,839)
|
|
(55,597)
|
Tax withholdings
related to share settlements, net of purchase plans
|
|
(13,665)
|
|
(10,132)
|
Dividends
|
|
(56,257)
|
|
(51,003)
|
Contribution from
non-controlling interest
|
|
9
|
|
—
|
Net cash flows from
(used by) financing activities
|
|
(537,045)
|
|
324,258
|
Effect of exchange rate
changes on cash
|
|
6,970
|
|
(1,862)
|
Increase
(decrease) in cash,
restricted cash, and cash equivalents
|
|
(200,558)
|
|
35,400
|
Cash, restricted cash
and cash equivalents at beginning of period
|
|
679,243
|
|
501,129
|
Cash, restricted cash
and cash equivalents at end of period
|
|
$
478,685
|
|
$
536,529
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
150,658
|
|
$
189,491
|
Cash paid for
interest
|
|
51,305
|
|
34,394
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
475,489
|
|
$
410,265
|
Restricted
cash
|
|
3,196
|
|
126,264
|
Total cash, restricted
cash and cash equivalents
|
|
$
478,685
|
|
$
536,529
|
COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
This press release contains financial measures not derived in
accordance with U.S. generally accepted accounting principles
("GAAP"). Reconciliations to the most comparable GAAP measure are
provided below.
Adjusted EBITDA, core EBITDA and adjusted earnings are non-GAAP
financial measures. Adjusted earnings per diluted share is defined
as adjusted earnings on a diluted per share basis.
Non-GAAP financial measures should be viewed in addition to, and
not as alternatives for, the most directly comparable measures
derived in accordance with GAAP and may not be comparable to
similar measures presented by other companies. However, we believe
that the non-GAAP financial measures provide relevant and useful
information to management, investors, analysts, creditors and other
interested parties in our industry as they allow: (i) comparison of
our earnings to those of our competitors; (ii) a supplemental
measure of our underlying business operational performance; and
(iii) the assessment of period-to-period performance trends.
Management uses non-GAAP financial measures to evaluate financial
performance and set target benchmarks for annual and long-term cash
incentive performance plans.
A reconciliation of net earnings to adjusted EBITDA and core
EBITDA is provided below:
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
thousands)
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
5/31/2023
|
|
5/31/2022
|
Net earnings
|
$
233,971
|
|
$
179,849
|
|
$
261,774
|
|
$
288,630
|
|
$
312,429
|
|
$
675,594
|
|
$
928,632
|
Interest
expense
|
8,878
|
|
9,945
|
|
13,045
|
|
14,230
|
|
13,433
|
|
31,868
|
|
36,479
|
Income
taxes
|
76,099
|
|
55,641
|
|
76,725
|
|
49,991
|
|
92,590
|
|
208,465
|
|
247,894
|
Depreciation and
amortization
|
55,129
|
|
51,216
|
|
51,183
|
|
49,081
|
|
43,583
|
|
157,528
|
|
125,943
|
Asset
impairments
|
1
|
|
36
|
|
9
|
|
453
|
|
3,245
|
|
46
|
|
4,473
|
Adjusted
EBITDA
|
374,078
|
|
296,687
|
|
402,736
|
|
402,385
|
|
465,280
|
|
1,073,501
|
|
1,343,421
|
Non-cash equity
compensation
|
10,376
|
|
16,949
|
|
16,675
|
|
9,122
|
|
11,986
|
|
44,000
|
|
37,856
|
Mill operational
start-up costs(1)
|
7,264
|
|
6,811
|
|
5,574
|
|
—
|
|
—
|
|
19,649
|
|
—
|
Settlement of New
Markets Tax Credit transaction
|
—
|
|
(17,659)
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
Acquisition and
integration related costs and other
|
—
|
|
—
|
|
—
|
|
1,008
|
|
4,478
|
|
—
|
|
7,643
|
Purchase accounting
effect on inventory
|
—
|
|
—
|
|
—
|
|
6,506
|
|
2,169
|
|
—
|
|
2,169
|
Gain on sale of
assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(273,315)
|
Loss on debt
extinguishment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,052
|
Core EBITDA
|
$
391,718
|
|
$
302,788
|
|
$
424,985
|
|
$
419,021
|
|
$
483,913
|
|
$
1,119,491
|
|
$
1,133,826
|
|
|
(1)
|
Net of depreciation and
non-cash equity compensation.
|
A reconciliation of net earnings to adjusted earnings is
provided below:
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in thousands,
except per share data)
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
5/31/2023
|
|
5/31/2022
|
Net earnings
|
$ 233,971
|
|
$ 179,849
|
|
$ 261,774
|
|
$ 288,630
|
|
$
312,429
|
|
$
675,594
|
|
$
928,632
|
Asset
impairments
|
1
|
|
36
|
|
9
|
|
453
|
|
3,245
|
|
46
|
|
4,473
|
Mill operational
start-up costs
|
7,287
|
|
6,825
|
|
5,584
|
|
—
|
|
—
|
|
19,696
|
|
—
|
Settlement of New
Markets Tax Credit transaction
|
—
|
|
(17,659)
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
Acquisition and
integration related costs and other
|
—
|
|
—
|
|
—
|
|
1,008
|
|
4,478
|
|
—
|
|
7,643
|
Purchase accounting
effect on inventory
|
—
|
|
—
|
|
—
|
|
6,506
|
|
2,169
|
|
—
|
|
2,169
|
Gain on sale of
assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(273,315)
|
Loss on debt
extinguishment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,052
|
Total adjustments
(pre-tax)
|
$ 7,288
|
|
$
(10,798)
|
|
$ 5,593
|
|
$ 7,967
|
|
$ 9,892
|
|
$
2,083
|
|
$ (242,978)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
restructuring
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(36,237)
|
Related tax effects on
adjustments
|
(1,530)
|
|
2,268
|
|
(1,175)
|
|
(1,673)
|
|
(2,077)
|
|
(437)
|
|
57,532
|
Total tax
items
|
(1,530)
|
|
2,268
|
|
(1,175)
|
|
(1,673)
|
|
(2,077)
|
|
(437)
|
|
21,295
|
Adjusted
earnings
|
$ 239,729
|
|
$ 171,319
|
|
$ 266,192
|
|
$ 294,924
|
|
$
320,244
|
|
$
677,240
|
|
$
706,949
|
Net earnings per
diluted share
|
$ 1.98
|
|
$
1.51
|
|
$
2.20
|
|
$
2.40
|
|
$
2.54
|
|
$
5.69
|
|
$
7.55
|
Adjusted earnings per
diluted share
|
$ 2.02
|
|
$
1.44
|
|
$
2.24
|
|
$
2.45
|
|
$
2.61
|
|
$
5.70
|
|
$
5.75
|
View original
content:https://www.prnewswire.com/news-releases/commercial-metals-company-reports-third-quarter-fiscal-2023-results-301857767.html
SOURCE Commercial Metals Company