- Second quarter net earnings of $85.8 million, or $0.73 per diluted share
- Consolidated core EBITDA of $224.4
million; core EBITDA margin of 12.1%
- Downstream contract awards rebounded to the highest
quarterly level in nearly two years, signaling strength in the
pipeline ahead of the upcoming construction season
- North America and Europe
Steel Groups achieved meaningful year-over-year improvements in
controllable costs per ton of finished steel shipped, contributing
positively to financial performance
- Europe Steel Group operating results (excluding energy
rebates) improved sequentially; market supply and demand in better
balance
- Continued progress on strategic growth initiatives;
Arizona 2 successfully produced
and sold merchant bar product, marking a global micro mill
steelmaking first
IRVING,
Texas, March 21, 2024 /PRNewswire/ -- Commercial
Metals Company (NYSE: CMC) today announced financial results for
its fiscal second quarter ended February 29,
2024. Net earnings were $85.8
million, or $0.73 per diluted
share, on net sales of $1.8 billion,
compared to prior year period net earnings of $179.8 million, or $1.51 per diluted share, on net sales of
$2.0 billion.
During the second quarter of fiscal 2024, the Company recorded a
net after-tax charge of $17.2 million
related to commissioning efforts at the Arizona 2 micro mill. Excluding this item,
second quarter adjusted earnings were $103.1
million, or $0.88 per diluted
share, compared to adjusted earnings of $171.3 million, or $1.44 per diluted share, in the prior year
period. Prior year period adjustments included a $5.5 million after-tax charge related to
commissioning efforts at the Arizona 2 micro mill, as well as a
$14.0 million after-tax benefit that
was reflected within Corporate and Other related to a New Market
Tax Credit Settlement associated with CMC's Steel Oklahoma micro
mill. "Adjusted EBITDA," "core EBITDA," "core EBITDA margin,"
"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.
Peter Matt, President and Chief
Executive Officer, said, "CMC generated historically strong
financial results during the second quarter despite seasonal
weakness and challenging weather conditions in several key
geographies. Core EBITDA and core EBITDA margin remained well
above long-term averages, demonstrating the ability to consistently
generate higher margins in our business. We continued to see good
fundamentals within our North American markets, highlighted by
several encouraging developments during the quarter. Steel product
margins over scrap exited the quarter on an upward trajectory,
which provides a solid baseline for continued strong margins into
the seasonally robust third and fourth quarters. Additionally, new
contract awards in our downstream business rebounded sharply,
pointing to strength in the construction pipeline, and driving a
sequential quarter increase in project backlog volumes."
Mr. Matt added, "Market conditions for our Europe Steel Group
have shown some improvement in recent months, which we believe is a
function of stabilizing demand and supply rationalizations. This
more supportive market backdrop combined with excellent cost
performance drove a substantial improvement in operating results,
excluding energy rebates, compared to recent quarters. While
conditions in Europe remain
difficult, a combination of improving economic data and government
sponsored investment could bolster Polish market demand in the
quarters ahead."
"During the second quarter, we continued to invest and build for
the future. In January, our new Arizona 2 plant became the first micro mill in
the world to roll merchant bar quality (MBQ) product. Commissioning
of MBQ continues to progress well, and we have successfully
produced and sold several product varieties. Based on our
current outlook for production mix and volume levels, the plant is
anticipated to achieve EBITDA breakeven results by the end of the
fiscal year. Site improvements at our Steel West Virginia
micro mill are nearing completion. Initial equipment deliveries are
scheduled for the spring and early summer, and we expect to remain
on plan for a start-up in late calendar 2025. These projects,
together with our recent acquisitions, position us to take
advantage of favorable structural trends powering domestic
construction, and are expected to drive strong future growth in
earnings, cash flow, and shareholder value," Matt concluded.
The Company's balance sheet and liquidity position remained
strong. As of February 29, 2024, cash
and cash equivalents totaled $638.3
million, with available liquidity of nearly $1.5 billion. During the quarter, CMC repurchased
945,205 shares of common stock valued at $47.9 million in the aggregate. As of
February 29, 2024, $510.4 million remained available under the
current share repurchase authorization.
On March 20, 2024, the board of directors declared a
quarterly dividend of $0.18 per share
of CMC common stock payable to stockholders of record on
April 1, 2024, which will represent an increase of
approximately 13% from the prior dividend paid in February 2024. The dividend to be paid on
April 10, 2024, marks the 238th consecutive
quarterly payment by the Company.
Business Segments - Fiscal Second Quarter 2024
Review
Demand for CMC's finished steel products in
North America continued to be
healthy during the quarter. Solid construction activity
supported a 4.9% year-over-year increase in total North America
Steel Group rebar shipments, a measure that includes rebar sold
directly from mills as well as fabricated product shipped from
CMC's downstream facilities. The construction pipeline remained
historically strong with a large number of potential projects. The
rate of new contract awards improved significantly, marking the
strongest second quarter on record, and driving an 11% sequential
increase in downstream backlog volumes. Demand from industrial end
markets, which is important for merchant products, was in-line with
the prior year's second quarter.
Adjusted EBITDA for the North America Steel Group decreased to
$222.3 million in the second quarter
of fiscal 2024 from $274.2 million in
the prior year period. The earnings reduction was driven by lower
margins over scrap costs on steel and downstream products,
partially offset by meaningful improvements in controllable cost
performance. The adjusted EBITDA margin for the North America Steel
Group of 15.0% compares to 18.2% in the prior year period.
North America Steel Group shipment volumes of finished steel,
which include steel products and downstream products, increased
3.6% year-over-year. The average selling price for steel products
decreased $80 per ton compared to the
second quarter of fiscal 2023, while the cost of scrap utilized
increased $33 per ton, resulting in a
year-over-year decrease in steel products margin over scrap of
$113 per ton. The average selling
price for downstream products declined by $63 per ton from the prior year period.
Europe market conditions
improved during the second quarter in comparison to recent
quarters, but long-steel consumption remained below historical
levels. Regional long steel producers took significant actions to
rationalize supply, while inventories across the supply chain were
reduced. As a result, product markets were in better balance,
allowing both selling prices and metal margins to increase. The
Europe Steel Group reported an adjusted EBITDA loss of $8.6 million, marking a meaningful improvement
from the prior two quarters which, excluding energy rebates of
approximately $66 million in the
first quarter of fiscal 2024, averaged losses of approximately
$30 million. On a sequential basis,
financial results benefited from higher margins over scrap and
lower controllable costs per ton. Europe Steel Group's average
selling price increased $40 per ton
from the first quarter of fiscal 2024, while scrap costs increased
by $29 per ton, leading to a
$11 per ton margin expansion.
Emerging Businesses Group second quarter net sales of
$156.0 million represented an
increase of 1.6% from the prior year period, driven largely by the
addition of CMC Anchoring Systems. Adjusted EBITDA for the
Group of $17.9 million was down 32%
compared to the prior year period. Both net sales and
adjusted EBITDA were negatively impacted by severe weather across
much of the United States that
caused project delays for geogrid and Geopier(R)
solutions, as well as reduced activity in CMC's Texas-focused Construction Solutions
business. Additionally, delayed starts on several key
projects hindered financial performance within regions outside of
North America. These factors more than offset the positive
impacts from the addition of CMC Anchoring Systems and strong
profitability within the Company's heat-treating operations.
Setting aside weather disruptions, demand conditions in our North
American markets remained solid during the quarter. Adjusted
EBITDA margin of 11.5% represented a decline of 580 basis points
relative to the prior year period.
Outlook
Mr. Matt said, "Finished steel shipments
within our North America Steel Group are expected to follow a
typical seasonal pattern during the third quarter, while adjusted
EBITDA margin should be largely stable on a sequential basis.
Conditions in Europe are expected
to remain challenging, but adjusted EBITDA is anticipated to
approach breakeven levels during the third quarter. Financial
results for our Emerging Businesses Group should improve
meaningfully, driven by the normal seasonal uptick in demand,
strong underlying market fundamentals and a healthy order
book."
Mr. Matt added, "We continue to expect robust spring and summer
construction activity driven by increased infrastructure
investments, which we anticipate will support an already strong
demand backdrop in both the North America Steel Group and the
Emerging Businesses Group. Business conditions for our Europe Steel
Group are slowly improving, and should further benefit from
increased residential construction activity as a government program
aimed at first-time homebuyers, and other government sponsored
investment programs, begin to impact steel demand."
Conference Call
CMC invites you to listen to a live
broadcast of its second quarter fiscal 2024 conference call today,
Thursday, March 21, 2024, at 11:00 a.m.
ET. Peter Matt, President and
Chief Executive Officer, 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 CMC
CMC is an innovative solutions provider
helping build a stronger, safer, and more sustainable world.
Through an extensive manufacturing network principally located in
the United States and Central Europe, we offer products and
technologies to meet the critical reinforcement needs of the global
construction sector. CMC's solutions support construction across a
wide variety of applications, including infrastructure,
non-residential, residential, industrial, and energy generation and
transmission.
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, growth
rates in certain segments, product margins within our Emerging
Businesses Group, 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,
2023, 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
downstream contracts within our vertically integrated steel
operations 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 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; our
ability to successfully execute leadership transitions; 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 AND SUBSIDIARIES
FINANCIAL &
OPERATING STATISTICS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands,
except per ton amounts)
|
|
2/29/2024
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
2/29/2024
|
|
2/28/2023
|
North America Steel
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$ 1,486,202
|
|
$ 1,592,650
|
|
$ 1,717,979
|
|
$ 1,818,391
|
|
$ 1,503,774
|
|
$
3,078,852
|
|
$
3,167,935
|
Adjusted
EBITDA
|
|
222,294
|
|
266,820
|
|
336,843
|
|
367,561
|
|
274,240
|
|
489,114
|
|
624,027
|
Adjusted EBITDA
margin
|
|
15.0 %
|
|
16.8 %
|
|
19.6 %
|
|
20.2 %
|
|
18.2 %
|
|
15.9 %
|
|
19.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
347
|
|
374
|
|
344
|
|
409
|
|
321
|
|
721
|
|
637
|
Rebar
|
|
460
|
|
522
|
|
542
|
|
539
|
|
425
|
|
982
|
|
886
|
Merchant bar and
other
|
|
234
|
|
230
|
|
215
|
|
249
|
|
235
|
|
464
|
|
478
|
Steel
products
|
|
694
|
|
752
|
|
757
|
|
788
|
|
660
|
|
1,446
|
|
1,364
|
Downstream
products
|
|
316
|
|
346
|
|
387
|
|
382
|
|
315
|
|
662
|
|
697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
880
|
|
$
783
|
|
$
838
|
|
$
833
|
|
$
868
|
|
$
829
|
|
$
846
|
Steel
products
|
|
905
|
|
892
|
|
932
|
|
979
|
|
985
|
|
898
|
|
1,003
|
Downstream
products
|
|
1,358
|
|
1,389
|
|
1,428
|
|
1,452
|
|
1,421
|
|
1,374
|
|
1,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of raw materials
per ton
|
|
$
658
|
|
$
578
|
|
$
606
|
|
$
619
|
|
$
639
|
|
$
617
|
|
$
618
|
Cost of ferrous scrap
utilized per ton
|
|
$
379
|
|
$
343
|
|
$
338
|
|
$
384
|
|
$
346
|
|
$
361
|
|
$
335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
526
|
|
$
549
|
|
$
594
|
|
$
595
|
|
$
639
|
|
$
537
|
|
$
668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe Steel
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$
192,500
|
|
$
225,175
|
|
$
273,961
|
|
$
330,767
|
|
$
337,560
|
|
$
417,675
|
|
$
724,063
|
Adjusted
EBITDA
|
|
(8,611)
|
|
38,942
|
|
(30,081)
|
|
5,837
|
|
11,469
|
|
30,331
|
|
72,717
|
Adjusted EBITDA
margin
|
|
(4.5) %
|
|
17.3 %
|
|
(11.0) %
|
|
1.8 %
|
|
3.4 %
|
|
7.3 %
|
|
10.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
64
|
|
122
|
|
151
|
|
146
|
|
183
|
|
186
|
|
387
|
Merchant bar and
other
|
|
211
|
|
221
|
|
238
|
|
283
|
|
253
|
|
432
|
|
522
|
Steel
products
|
|
275
|
|
343
|
|
389
|
|
429
|
|
436
|
|
618
|
|
909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
products
|
|
$
673
|
|
$
633
|
|
$
682
|
|
$
753
|
|
$
756
|
|
$
651
|
|
$
775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of ferrous scrap
utilized per ton
|
|
$
394
|
|
$
365
|
|
$
398
|
|
$
427
|
|
$
389
|
|
$
380
|
|
$
377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
279
|
|
$
268
|
|
$
284
|
|
$
326
|
|
$
367
|
|
$
271
|
|
$
398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Businesses
Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$
155,994
|
|
$
177,239
|
|
$
208,559
|
|
$
189,055
|
|
$
153,598
|
|
$
333,233
|
|
$
324,132
|
Adjusted
EBITDA
|
|
17,929
|
|
30,862
|
|
42,612
|
|
38,395
|
|
26,551
|
|
48,791
|
|
57,977
|
Adjusted EBITDA
margin
|
|
11.5 %
|
|
17.4 %
|
|
20.4 %
|
|
20.3 %
|
|
17.3 %
|
|
14.6 %
|
|
17.9 %
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
BUSINESS SEGMENTS
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
|
2/29/2024
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
2/29/2024
|
|
2/28/2023
|
Net sales from
external customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Steel
Group
|
|
$ 1,486,202
|
|
$ 1,592,650
|
|
$ 1,717,979
|
|
$ 1,818,391
|
|
$ 1,503,774
|
|
$ 3,078,852
|
|
$ 3,167,935
|
Europe Steel
Group
|
|
192,500
|
|
225,175
|
|
273,961
|
|
330,767
|
|
337,560
|
|
417,675
|
|
724,063
|
Emerging Businesses
Group
|
|
155,994
|
|
177,239
|
|
208,559
|
|
189,055
|
|
153,598
|
|
333,233
|
|
324,132
|
Corporate and
Other
|
|
13,591
|
|
7,987
|
|
8,729
|
|
6,776
|
|
23,071
|
|
21,578
|
|
29,186
|
Total net sales from
external customers
|
|
$ 1,848,287
|
|
$ 2,003,051
|
|
$ 2,209,228
|
|
$ 2,344,989
|
|
$ 2,018,003
|
|
$ 3,851,338
|
|
$ 4,245,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Steel
Group
|
|
$
222,294
|
|
$
266,820
|
|
$
336,843
|
|
$
367,561
|
|
$
274,240
|
|
$
489,114
|
|
$
624,027
|
Europe Steel
Group
|
|
(8,611)
|
|
38,942
|
|
(30,081)
|
|
5,837
|
|
11,469
|
|
30,331
|
|
72,717
|
Emerging Businesses
Group
|
|
17,929
|
|
30,862
|
|
42,612
|
|
38,395
|
|
26,551
|
|
48,791
|
|
57,977
|
Corporate and
Other
|
|
(34,512)
|
|
(30,987)
|
|
(38,171)
|
|
(37,715)
|
|
(15,573)
|
|
(65,499)
|
|
(55,298)
|
Total adjusted
EBITDA
|
|
$
197,100
|
|
$
305,637
|
|
$
311,203
|
|
$
374,078
|
|
$
296,687
|
|
$
502,737
|
|
$
699,423
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands,
except share and per share data)
|
|
February 29,
2024
|
|
February 28,
2023
|
|
February 29,
2024
|
|
February 28,
2023
|
Net sales
|
|
$
1,848,287
|
|
$
2,018,003
|
|
$
3,851,338
|
|
$
4,245,316
|
Costs and operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
1,552,046
|
|
1,621,763
|
|
3,156,114
|
|
3,341,177
|
Selling, general and
administrative expenses
|
|
167,444
|
|
150,805
|
|
329,976
|
|
307,160
|
Interest
expense
|
|
11,878
|
|
9,945
|
|
23,634
|
|
22,990
|
Net costs and operating
expenses
|
|
1,731,368
|
|
1,782,513
|
|
3,509,724
|
|
3,671,327
|
Earnings before income
taxes
|
|
116,919
|
|
235,490
|
|
341,614
|
|
573,989
|
Income taxes
|
|
31,072
|
|
55,641
|
|
79,494
|
|
132,366
|
Net earnings
|
|
$
85,847
|
|
$
179,849
|
|
$
262,120
|
|
$
441,623
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.74
|
|
$
1.53
|
|
$
2.25
|
|
$
3.77
|
Diluted
|
|
0.73
|
|
1.51
|
|
2.22
|
|
3.71
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
|
$
0.16
|
|
$
0.16
|
|
$
0.32
|
|
$
0.32
|
Average basic shares
outstanding
|
|
116,396,530
|
|
117,224,517
|
|
116,584,235
|
|
117,249,266
|
Average diluted shares
outstanding
|
|
117,524,113
|
|
118,723,259
|
|
118,051,249
|
|
118,985,098
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except share and per share data)
|
|
February 29,
2024
|
|
August 31,
2023
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
638,261
|
|
$
592,332
|
Accounts receivable
(less allowance for doubtful accounts of $4,335 and
$4,135)
|
|
1,118,514
|
|
1,240,217
|
Inventories,
net
|
|
1,150,447
|
|
1,035,582
|
Prepaid and other
current assets
|
|
290,868
|
|
276,024
|
Total current
assets
|
|
3,198,090
|
|
3,144,155
|
Property, plant and
equipment, net
|
|
2,474,520
|
|
2,409,360
|
Intangible assets,
net
|
|
245,945
|
|
259,161
|
Goodwill
|
|
383,587
|
|
385,821
|
Other noncurrent
assets
|
|
360,123
|
|
440,597
|
Total assets
|
|
$
6,662,265
|
|
$
6,639,094
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
367,944
|
|
$
364,390
|
Accrued expenses and
other payables
|
|
359,015
|
|
438,811
|
Current maturities of
long-term debt and short-term borrowings
|
|
35,588
|
|
40,513
|
Total current
liabilities
|
|
762,547
|
|
843,714
|
Deferred income
taxes
|
|
293,342
|
|
306,801
|
Other noncurrent
liabilities
|
|
257,472
|
|
253,181
|
Long-term
debt
|
|
1,126,216
|
|
1,114,284
|
Total
liabilities
|
|
2,439,577
|
|
2,517,980
|
Stockholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share; authorized 200,000,000 shares; issued
129,060,664 shares; outstanding 116,023,685 and 116,515,427
shares
|
|
1,290
|
|
1,290
|
Additional paid-in
capital
|
|
389,568
|
|
394,672
|
Accumulated other
comprehensive loss
|
|
(71,519)
|
|
(3,778)
|
Retained
earnings
|
|
4,322,008
|
|
4,097,262
|
Less treasury stock,
13,036,979 and 12,545,237 shares at cost
|
|
(418,900)
|
|
(368,573)
|
Stockholders'
equity
|
|
4,222,447
|
|
4,120,873
|
Stockholders' equity
attributable to non-controlling interests
|
|
241
|
|
241
|
Total stockholders'
equity
|
|
4,222,688
|
|
4,121,114
|
Total liabilities and
stockholders' equity
|
|
$
6,662,265
|
|
$
6,639,094
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Six Months
Ended
|
(in
thousands)
|
|
February 29,
2024
|
|
February 28,
2023
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
262,120
|
|
$
441,623
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
137,485
|
|
102,399
|
Stock-based
compensation
|
|
23,047
|
|
33,624
|
Write-down of
inventory
|
|
10,392
|
|
5,532
|
Deferred income taxes
and other long-term taxes
|
|
1,901
|
|
26,930
|
Other
|
|
2,225
|
|
4,616
|
Settlement of New
Markets Tax Credit transaction
|
|
—
|
|
(17,659)
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
(87,149)
|
|
(38,158)
|
Net cash flows from
operating activities
|
|
350,021
|
|
558,907
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(160,772)
|
|
(289,251)
|
Acquisitions, net of
cash acquired
|
|
—
|
|
(65,153)
|
Other
|
|
2,312
|
|
1,802
|
Net cash flows used by
investing activities
|
|
(158,460)
|
|
(352,602)
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Repayments of
long-term debt
|
|
(17,199)
|
|
(160,263)
|
Debt issuance
costs
|
|
—
|
|
(1,800)
|
Debt extinguishment
costs
|
|
—
|
|
(96)
|
Proceeds from accounts
receivable facilities
|
|
38,079
|
|
74,963
|
Repayments under
accounts receivable facilities
|
|
(45,693)
|
|
(77,843)
|
Treasury stock
acquired
|
|
(76,347)
|
|
(66,323)
|
Tax withholdings
related to share settlements, net of purchase plans
|
|
(9,227)
|
|
(14,789)
|
Dividends
|
|
(37,374)
|
|
(37,524)
|
Net cash flows used by
financing activities
|
|
(147,761)
|
|
(283,675)
|
Effect of exchange rate
changes on cash
|
|
380
|
|
6,545
|
Increase
(decrease) in cash,
restricted cash, and cash equivalents
|
|
44,180
|
|
(70,825)
|
Cash, restricted cash
and cash equivalents at beginning of period
|
|
595,717
|
|
679,243
|
Cash, restricted cash
and cash equivalents at end of period
|
|
$
639,897
|
|
$
608,418
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
86,506
|
|
$
114,585
|
Cash paid for
interest
|
|
24,260
|
|
35,036
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
638,261
|
|
$
603,966
|
Restricted
cash
|
|
1,636
|
|
4,452
|
Total cash, restricted
cash and cash equivalents
|
|
$
639,897
|
|
$
608,418
|
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, core EBITDA margin and adjusted
earnings are non-GAAP financial measures. Adjusted earnings per
diluted share is defined as adjusted earnings on a diluted per
share basis. Core EBITDA margin is defined as core EBITDA divided
by net sales. The adjustment "Mill operational commissioning costs"
represents costs incurred during the final stages of testing and
commissioning of the Company's third micro mill, until the point at
which the micro mill is fully operational. The adjustment
"Settlement of New Markets Tax Credit transaction" represents the
recognition of deferred revenue from 2016 and 2017 resulting from
the Company's participation in the New Markets Tax Credit program
provided for in the Community Renewal Tax Relief Act of 2000 during
the development of a micro mill, spooler and T-post shop located in
eligible zones as determined by the Internal Revenue Service.
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
|
|
Six Months
Ended
|
(in
thousands)
|
|
2/29/2024
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
2/29/2024
|
|
2/28/2023
|
Net earnings
|
|
$
85,847
|
|
$
176,273
|
|
$
184,166
|
|
$
233,971
|
|
$
179,849
|
|
$
262,120
|
|
$
441,623
|
Interest
expense
|
|
11,878
|
|
11,756
|
|
8,259
|
|
8,878
|
|
9,945
|
|
23,634
|
|
22,990
|
Income
taxes
|
|
31,072
|
|
48,422
|
|
53,742
|
|
76,099
|
|
55,641
|
|
79,494
|
|
132,366
|
Depreciation and
amortization
|
|
68,299
|
|
69,186
|
|
61,302
|
|
55,129
|
|
51,216
|
|
137,485
|
|
102,399
|
Asset
impairments
|
|
4
|
|
—
|
|
3,734
|
|
1
|
|
36
|
|
4
|
|
45
|
Adjusted
EBITDA
|
|
197,100
|
|
305,637
|
|
311,203
|
|
374,078
|
|
296,687
|
|
502,737
|
|
699,423
|
Non-cash equity
compensation
|
|
14,988
|
|
8,059
|
|
16,529
|
|
10,376
|
|
16,949
|
|
23,047
|
|
33,624
|
Mill operational
commissioning costs(1)
|
|
12,286
|
|
11,593
|
|
12,297
|
|
7,264
|
|
6,811
|
|
23,879
|
|
12,385
|
Settlement of New
Markets Tax Credit transaction
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
|
(17,659)
|
Core EBITDA
|
|
$
224,374
|
|
$
325,289
|
|
$
340,029
|
|
$
391,718
|
|
$
302,788
|
|
$
549,663
|
|
$
727,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,848,287
|
|
$
2,003,051
|
|
$
2,209,228
|
|
$
2,344,989
|
|
$
2,018,003
|
|
$
3,851,338
|
|
$
4,245,316
|
Core EBITDA
margin
|
|
12.1 %
|
|
16.2 %
|
|
15.4 %
|
|
16.7 %
|
|
15.0 %
|
|
14.3 %
|
|
17.1 %
|
|
|
|
|
|
(1)
|
Net of depreciation
.
|
A reconciliation of net earnings to adjusted earnings is
provided below:
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands,
except per share data)
|
|
2/29/2024
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
2/29/2024
|
|
2/28/2023
|
Net earnings
|
|
$
85,847
|
|
$ 176,273
|
|
$ 184,166
|
|
$ 233,971
|
|
$
179,849
|
|
$
262,120
|
|
$
441,623
|
Asset
impairments
|
|
4
|
|
—
|
|
3,734
|
|
1
|
|
36
|
|
4
|
|
45
|
Mill operational
commissioning costs
|
|
21,774
|
|
20,752
|
|
16,131
|
|
7,287
|
|
6,825
|
|
42,526
|
|
12,409
|
Settlement of New
Markets Tax Credit transaction
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
|
(17,659)
|
Total adjustments
(pre-tax)
|
|
$
21,778
|
|
$
20,752
|
|
$
19,865
|
|
$ 7,288
|
|
$
(10,798)
|
|
$
42,530
|
|
$ (5,205)
|
Related tax effects on
adjustments
|
|
(4,573)
|
|
(4,358)
|
|
(4,172)
|
|
(1,530)
|
|
2,268
|
|
(8,931)
|
|
1,093
|
Adjusted
earnings
|
|
$ 103,052
|
|
$
192,667
|
|
$
199,859
|
|
$
239,729
|
|
$
171,319
|
|
$
295,719
|
|
$
437,511
|
Net earnings per
diluted share
|
|
$ 0.73
|
|
$
1.49
|
|
$
1.56
|
|
$
1.98
|
|
$
1.51
|
|
$
2.22
|
|
$
3.71
|
Adjusted earnings per
diluted share
|
|
$ 0.88
|
|
$
1.63
|
|
$
1.69
|
|
$
2.02
|
|
$
1.44
|
|
$
2.51
|
|
$
3.68
|
View original
content:https://www.prnewswire.com/news-releases/cmc-reports-second-quarter-fiscal-2024-results-302095436.html
SOURCE Commercial Metals Company