- First quarter net earnings of $176.3 million, or $1.49 per diluted share
- Consolidated core EBITDA of $325.3
million; core EBITDA margin of 16.2%
- Generated cash flow from operating activities of
$261.1 million and free cash flow of
$194.1 million
- Continued healthy demand levels for North America Steel
Group as finished steel volumes increased by 1.1% on a
year-over-year basis
- Continued progress on strategic growth initiatives:
Arizona 2 production increasing
steadily and construction well underway at future Steel West
Virginia site
- Segment reporting realigned to reflect the manner in which
the business is managed and support strategic priorities and
execution
IRVING,
Texas, Jan. 8, 2024 /PRNewswire/ -- Commercial
Metals Company (NYSE: CMC) today announced financial results for
its fiscal first quarter ended November 30,
2023. Net earnings were $176.3
million, or $1.49 per diluted
share, on net sales of $2.0 billion,
compared to prior year period net earnings of $261.8 million, or $2.20 per diluted share, on net sales of
$2.2 billion.
During the first quarter of fiscal 2024, the Company recorded a
net after-tax charge of $16.4 million
related to commissioning efforts at the Arizona 2 micro mill. Excluding this item,
first quarter adjusted earnings were $192.7
million, or $1.63 per diluted
share, compared to adjusted earnings of $266.2 million, or $2.24 per diluted share, in the prior year
period. "Adjusted EBITDA," "core EBITDA," "core EBITDA margin,"
"free cash flow," "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, "Our business again generated very strong
financial results during the first quarter, with core EBITDA, core
EBITDA margin, and cash flows continuing at historically strong
levels. Performance in our North America Steel Group was
supported by sustained healthy construction activity and
near-record margins on our downstream products. While steel product
margins experienced compression in the quarter, market
developments indicate this trend should halt or reverse in the
coming months. Our Europe Steel Group performed well against
a market environment challenged by weaker demand and lower product
margins. Encouragingly, selling prices and metal margins on
long products began to improve midway through the quarter, and
several green shoots have emerged that could bolster the Polish
market in the quarters ahead."
Mr. Matt added, "During the first quarter, we continued to
invest and build for the future. Following its successful
summer start-up, production levels at our new Arizona 2 micro mill improved throughout the
quarter, and we expect these to steadily increase in the months
ahead. Site improvements for our Steel West Virginia project should
be completed shortly, clearing the way to begin pouring
foundations. We have successfully integrated a number of our
recent acquisitions which extend our operational and commercial
capabilities and further our strategic position. All of these
initiatives broaden our exposure to the favorable structural trends
powering domestic construction, and are expected to drive strong
future growth in earnings, cash flow, and shareholder value."
"We recently changed our organizational structure and segment
reporting to support our strategic priorities of driving higher
through-the-cycle margins and growth. The decision to break out the
Emerging Businesses Group was motivated by the desire to provide
additional attention to this unique portfolio of solutions which we
believe have the potential to maintain higher, more stable margins
and an elevated rate of growth relative to our steel business,"
Matt concluded.
The Company's balance sheet and liquidity position remained
strong. As of November 30, 2023, cash and cash equivalents
totaled $704.6 million, with
available liquidity in excess of $1.5
billion. During the quarter, CMC repurchased 621,643 shares
of common stock valued at $28.4
million in the aggregate. As of November 30, 2023, $58.3
million remained available under the current share
repurchase authorization.
On January 4, 2024, the board of directors declared a
quarterly dividend of $0.16 per share
of CMC common stock payable to stockholders of record on
January 18, 2024. The dividend to be paid on February 1,
2024, marks the 237th consecutive quarterly payment by
the Company.
Business Segments - Fiscal First Quarter 2024 Review
Demand for CMC's finished steel products in North America continued to be healthy during
the quarter. Robust construction activity supported a 3%
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 high volumes of potential projects. However,
lower new contract awards have driven a year-over-year reduction in
the volume and value of CMC's downstream backlog from the peak
experienced last year. Demand from industrial end markets, which is
important for merchant products, was mixed, with certain
applications experiencing slower activity compared to the prior
year quarter.
Adjusted EBITDA for the North America Steel Group decreased
to $266.8 million in the first
quarter of fiscal 2024 from $349.8
million in the prior year period, driven by lower
margins over scrap costs on steel products and higher costs related
to the operational start-up of the Company's Arizona 2 micro mill. These factors more
than offset benefits from increased steel product shipments and
CMC's ongoing cost reduction efforts. The adjusted EBITDA
margin for the North America Steel Group of 16.8% compares to 21.0%
in the prior year period.
North America Steel Group shipment volumes of finished steel,
which include steel products and downstream products, increased
1.1% year-over-year. The average selling price for steel products
decreased $128 per ton compared to
the first quarter of fiscal 2023, while the cost of scrap utilized
increased $18 per ton, resulting in a
year-over-year decrease in steel products margin over scrap of
$146 per ton. The average selling
price for downstream products declined by $10 per ton from the prior year period.
Europe end market conditions
remained challenging during the quarter, as Polish construction
activity decelerated and industrial production across Central Europe remained muted. The
Europe Steel Group reported adjusted EBITDA of $38.9 million, compared to adjusted EBITDA of
$61.2 million in the prior year
period. First quarter 2024 results include two energy cost
rebates totaling approximately $66
million. Of these rebates, $27.7 million is related to an annual
CO2 credit under a government program that extends to
2030, and the remaining $38.6 million
is structured as a reimbursement by the Polish government for
elevated energy costs incurred during the European energy
crisis. Adjusted EBITDA for the prior year period included
$9.5 million related to the annual
CO2 program. The adjusted EBITDA margin for the
Europe Steel Group of 17.3% compares to 15.8% in the prior year
period.
Against this difficult market backdrop, Europe Steel Group's
average selling price decreased $159
per ton from the first quarter of the prior year, while scrap costs
decreased by only $1 per ton, leading
to metal margin compression. The decline in profitability,
excluding energy rebates, was also impacted by a 27% decrease in
shipment volumes compared to the prior year period, which reduced
fixed cost leverage.
Emerging Businesses Group first quarter net sales of
$177.2 million increased by 3.9% from
the prior year period, driven largely by the addition of CMC
Anchoring Systems. Demand conditions were generally positive
during the quarter, with relative strength in North America and a weaker environment
elsewhere. Construction activity in the United States drove solid demand for
geogrid solutions, construction services, CMC Anchoring Systems,
and performance reinforcing steels.
Adjusted EBITDA for the Emerging Businesses Group of
$30.9 million during the first
quarter was relatively flat compared to the prior year
period. The adjusted EBITDA margin of 17.4% represented a
decline of 100 basis points, as the positive impact from the
addition of CMC Anchoring Systems and the benefit of improved
adoption rates for proprietary geogrid solutions in North America were offset by weather delays in
the Central U.S. and lower construction activity in Europe and the Middle East.
Outlook
Mr. Matt said, "Margins on steel products are likely to
experience some further compression during the second quarter,
however, recent price announcements should support an inflection
and improved margins going forward. Downstream product
margins should exhibit good sequential stability. Conditions
in Europe are expected to remain
challenging, but adjusted EBITDA excluding energy rebates should
improve from the levels of the past two quarters. Financial
results for our Emerging Businesses Group are anticipated to follow
a typical seasonal pattern."
Mr. Matt continued, "looking beyond the second quarter, we
expect robust spring and summer construction activity driven by
increased infrastructure investments, which should support an
already strong demand backdrop in both the North America Steel
Group and the Emerging Businesses Group. Regarding the Europe
Steel Group, we expect that supply side adjustments and the impact
of increasing levels of residential and infrastructure construction
should drive sequential improvements in financial results beginning
in the spring construction season."
Conference Call
CMC invites you to listen to a live broadcast of its first
quarter fiscal 2024 conference call today, Monday, January 8,
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
|
(in thousands,
except per ton amounts)
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
North America Steel
Group
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$ 1,592,650
|
|
$ 1,717,979
|
|
$ 1,818,391
|
|
$ 1,503,774
|
|
$ 1,664,161
|
Adjusted
EBITDA
|
|
266,820
|
|
336,843
|
|
367,561
|
|
274,240
|
|
349,787
|
Adjusted EBITDA
margin
|
|
16.8 %
|
|
19.6 %
|
|
20.2 %
|
|
18.2 %
|
|
21.0 %
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
374
|
|
344
|
|
409
|
|
321
|
|
316
|
Rebar
|
|
522
|
|
542
|
|
539
|
|
425
|
|
461
|
Merchant bar and
other
|
|
230
|
|
215
|
|
249
|
|
235
|
|
243
|
Steel
products
|
|
752
|
|
757
|
|
788
|
|
660
|
|
704
|
Downstream
products
|
|
346
|
|
387
|
|
382
|
|
315
|
|
382
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
783
|
|
$
838
|
|
$
833
|
|
$
868
|
|
$
824
|
Steel
products
|
|
892
|
|
932
|
|
979
|
|
985
|
|
1,020
|
Downstream
products
|
|
1,389
|
|
1,428
|
|
1,452
|
|
1,421
|
|
1,399
|
|
|
|
|
|
|
|
|
|
|
|
Cost of raw materials
per ton
|
|
$
578
|
|
$
606
|
|
$
619
|
|
$
639
|
|
$
598
|
Cost of ferrous scrap
utilized per ton
|
|
$
343
|
|
$
338
|
|
$
384
|
|
$
346
|
|
$
325
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
549
|
|
$
594
|
|
$
595
|
|
$
639
|
|
$
695
|
|
|
|
|
|
|
|
|
|
|
|
Europe Steel
Group
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$
225,175
|
|
$
273,961
|
|
$
330,767
|
|
$
337,560
|
|
$
386,503
|
Adjusted
EBITDA
|
|
38,942
|
|
(30,081)
|
|
5,837
|
|
11,469
|
|
61,248
|
Adjusted EBITDA
margin
|
|
17.3 %
|
|
(11.0) %
|
|
1.8 %
|
|
3.4 %
|
|
15.8 %
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
122
|
|
151
|
|
146
|
|
183
|
|
204
|
Merchant bar and
other
|
|
221
|
|
238
|
|
283
|
|
253
|
|
269
|
Steel
products
|
|
343
|
|
389
|
|
429
|
|
436
|
|
473
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
Steel
products
|
|
$
633
|
|
$
682
|
|
$
753
|
|
$
756
|
|
$
792
|
|
|
|
|
|
|
|
|
|
|
|
Cost of ferrous scrap
utilized per ton
|
|
$
365
|
|
$
398
|
|
$
427
|
|
$
389
|
|
$
366
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
268
|
|
$
284
|
|
$
326
|
|
$
367
|
|
$
426
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Businesses
Group
|
|
|
|
|
|
|
|
|
|
|
Net sales from
external customers
|
|
$
177,239
|
|
$
208,559
|
|
$
189,055
|
|
$
153,598
|
|
$
170,534
|
Adjusted
EBITDA
|
|
30,862
|
|
42,612
|
|
38,395
|
|
26,551
|
|
31,427
|
Adjusted EBITDA
margin
|
|
17.4 %
|
|
20.4 %
|
|
20.3 %
|
|
17.3 %
|
|
18.4 %
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
BUSINESS SEGMENTS
(UNAUDITED)
|
|
|
Three Months
Ended
|
(in
thousands)
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
Net sales from
external customers
|
|
|
|
|
|
|
|
|
|
|
North America Steel
Group
|
|
$ 1,592,650
|
|
$ 1,717,979
|
|
$ 1,818,391
|
|
$ 1,503,774
|
|
$ 1,664,161
|
Europe Steel
Group
|
|
225,175
|
|
273,961
|
|
330,767
|
|
337,560
|
|
386,503
|
Emerging Businesses
Group
|
|
177,239
|
|
208,559
|
|
189,055
|
|
153,598
|
|
170,534
|
Corporate and
Other
|
|
7,987
|
|
8,729
|
|
6,776
|
|
23,071
|
|
6,115
|
Total net sales from
external customers
|
|
$ 2,003,051
|
|
$ 2,209,228
|
|
$ 2,344,989
|
|
$ 2,018,003
|
|
$ 2,227,313
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
North America Steel
Group
|
|
$
266,820
|
|
$
336,843
|
|
$
367,561
|
|
$
274,240
|
|
$
349,787
|
Europe Steel
Group
|
|
38,942
|
|
(30,081)
|
|
5,837
|
|
11,469
|
|
61,248
|
Emerging Businesses
Group
|
|
30,862
|
|
42,612
|
|
38,395
|
|
26,551
|
|
31,427
|
Corporate and
Other
|
|
(30,987)
|
|
(38,171)
|
|
(37,715)
|
|
(15,573)
|
|
(39,726)
|
Total adjusted
EBITDA
|
|
$
305,637
|
|
$
311,203
|
|
$
374,078
|
|
$
296,687
|
|
$
402,736
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
|
|
|
Three Months Ended
November 30,
|
(in thousands,
except share and per share data)
|
|
2023
|
|
2022
|
Net sales
|
|
$ 2,003,051
|
|
$
2,227,313
|
Costs and operating
expenses:
|
|
|
|
|
Cost of goods
sold
|
|
1,604,068
|
|
1,719,414
|
Selling, general and
administrative expenses
|
|
162,532
|
|
156,355
|
Interest
expense
|
|
11,756
|
|
13,045
|
Net costs and operating
expenses
|
|
1,778,356
|
|
1,888,814
|
Earnings before income
taxes
|
|
224,695
|
|
338,499
|
Income taxes
|
|
48,422
|
|
76,725
|
Net earnings
|
|
$
176,273
|
|
$
261,774
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
|
$
1.51
|
|
$
2.23
|
Diluted
|
|
1.49
|
|
2.20
|
|
|
|
|
|
Cash dividends per
share
|
|
$
0.16
|
|
$
0.16
|
Average basic shares
outstanding
|
|
116,771,939
|
|
117,273,743
|
Average diluted shares
outstanding
|
|
118,354,913
|
|
118,925,442
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except share and per share data)
|
|
November 30,
2023
|
|
August 31,
2023
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
704,603
|
|
$
592,332
|
Accounts receivable
(less allowance for doubtful accounts of $4,408 and
$4,135)
|
|
1,216,352
|
|
1,240,217
|
Inventories,
net
|
|
1,028,686
|
|
1,035,582
|
Prepaid and other
current assets
|
|
294,186
|
|
276,024
|
Total current
assets
|
|
3,243,827
|
|
3,144,155
|
Property, plant and
equipment, net
|
|
2,423,684
|
|
2,409,360
|
Intangible assets,
net
|
|
252,299
|
|
259,161
|
Goodwill
|
|
382,688
|
|
385,821
|
Other noncurrent
assets
|
|
392,671
|
|
440,597
|
Total assets
|
|
$
6,695,169
|
|
$
6,639,094
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
343,831
|
|
$
364,390
|
Accrued expenses and
other payables
|
|
409,126
|
|
438,811
|
Current maturities of
long-term debt and short-term borrowings
|
|
33,998
|
|
40,513
|
Total current
liabilities
|
|
786,955
|
|
843,714
|
Deferred income
taxes
|
|
317,518
|
|
306,801
|
Other noncurrent
liabilities
|
|
240,247
|
|
253,181
|
Long-term
debt
|
|
1,120,472
|
|
1,114,284
|
Total
liabilities
|
|
2,465,192
|
|
2,517,980
|
Stockholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share; authorized 200,000,000 shares;
issued 129,060,664 shares; outstanding 116,708,224 and
116,515,427 shares
|
|
1,290
|
|
1,290
|
Additional paid-in
capital
|
|
377,533
|
|
394,672
|
Accumulated other
comprehensive loss
|
|
(24,738)
|
|
(3,778)
|
Retained
earnings
|
|
4,254,787
|
|
4,097,262
|
Less treasury stock,
12,352,440 and 12,545,237 shares at cost
|
|
(379,136)
|
|
(368,573)
|
Stockholders'
equity
|
|
4,229,736
|
|
4,120,873
|
Stockholders' equity
attributable to non-controlling interests
|
|
241
|
|
241
|
Total stockholders'
equity
|
|
4,229,977
|
|
4,121,114
|
Total liabilities and
stockholders' equity
|
|
$
6,695,169
|
|
$
6,639,094
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Three Months Ended
November 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
176,273
|
|
$
261,774
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
69,186
|
|
51,183
|
Deferred income taxes
and other long-term taxes
|
|
21,343
|
|
16,744
|
Write-down of
inventory
|
|
10,655
|
|
4,527
|
Stock-based
compensation
|
|
8,059
|
|
16,675
|
Other
|
|
1,102
|
|
1,440
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
(25,558)
|
|
20,027
|
Net cash flows from
operating activities
|
|
261,060
|
|
372,370
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(66,991)
|
|
(133,052)
|
Acquisitions, net of
cash acquired
|
|
—
|
|
(63,745)
|
Other
|
|
518
|
|
1,247
|
Net cash flows used by
investing activities
|
|
(66,473)
|
|
(195,550)
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Repayments of
long-term debt
|
|
(9,276)
|
|
(154,631)
|
Debt issuance
costs
|
|
—
|
|
(1,800)
|
Debt extinguishment
costs
|
|
—
|
|
(69)
|
Proceeds from accounts
receivable facilities
|
|
9,421
|
|
49
|
Repayments under
accounts receivable facilities
|
|
(17,471)
|
|
(25,914)
|
Treasury stock
acquired
|
|
(28,408)
|
|
(49,149)
|
Tax withholdings
related to share settlements, net of purchase plans
|
|
(19,535)
|
|
(23,513)
|
Dividends
|
|
(18,748)
|
|
(18,787)
|
Net cash flows used by
financing activities
|
|
(84,017)
|
|
(273,814)
|
Effect of exchange rate
changes on cash
|
|
819
|
|
5,139
|
Increase
(decrease) in cash,
restricted cash, and cash equivalents
|
|
111,389
|
|
(91,855)
|
Cash, restricted cash
and cash equivalents at beginning of period
|
|
595,717
|
|
679,243
|
Cash, restricted cash
and cash equivalents at end of period
|
|
$
707,106
|
|
$
587,388
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
1,398
|
|
$
15,694
|
Cash paid for
interest
|
|
10,888
|
|
22,201
|
|
|
|
|
|
Noncash
activities:
|
|
|
|
|
Liabilities related to
additions of property, plant and equipment
|
|
$
17,828
|
|
$
47,429
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
704,603
|
|
$
582,069
|
Restricted
cash
|
|
2,503
|
|
5,319
|
Total cash, restricted
cash and cash equivalents
|
|
$
707,106
|
|
$
587,388
|
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, adjusted
earnings and free cash flow 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. Free cash flow is defined as net cash
flows from operating activities less capital expenditures.
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
|
(in
thousands)
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
Net earnings
|
|
$
176,273
|
|
$
184,166
|
|
$
233,971
|
|
$
179,849
|
|
$
261,774
|
Interest
expense
|
|
11,756
|
|
8,259
|
|
8,878
|
|
9,945
|
|
13,045
|
Income
taxes
|
|
48,422
|
|
53,742
|
|
76,099
|
|
55,641
|
|
76,725
|
Depreciation and
amortization
|
|
69,186
|
|
61,302
|
|
55,129
|
|
51,216
|
|
51,183
|
Asset
impairments
|
|
—
|
|
3,734
|
|
1
|
|
36
|
|
9
|
Adjusted
EBITDA
|
|
305,637
|
|
311,203
|
|
374,078
|
|
296,687
|
|
402,736
|
Non-cash equity
compensation
|
|
8,059
|
|
16,529
|
|
10,376
|
|
16,949
|
|
16,675
|
Mill operational
commissioning costs(1)
|
|
11,593
|
|
12,297
|
|
7,264
|
|
6,811
|
|
5,574
|
Settlement of New
Markets Tax Credit transaction
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
Core EBITDA
|
|
$
325,289
|
|
$
340,029
|
|
$
391,718
|
|
$
302,788
|
|
$
424,985
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,003,051
|
|
$
2,209,228
|
|
$
2,344,989
|
|
$
2,018,003
|
|
$
2,227,313
|
Core EBITDA
margin
|
|
16.2 %
|
|
15.4 %
|
|
16.7 %
|
|
15.0 %
|
|
19.1 %
|
(1) Net of
depreciation.
|
|
|
A reconciliation of net earnings to adjusted earnings is
provided below:
|
|
Three Months
Ended
|
(in thousands,
except per share data)
|
|
11/30/2023
|
|
8/31/2023
|
|
5/31/2023
|
|
2/28/2023
|
|
11/30/2022
|
Net earnings
|
|
$ 176,273
|
|
$ 184,166
|
|
$ 233,971
|
|
$ 179,849
|
|
$
261,774
|
Asset
impairments
|
|
—
|
|
3,734
|
|
1
|
|
36
|
|
9
|
Mill operational
commissioning costs
|
|
20,752
|
|
16,131
|
|
7,287
|
|
6,825
|
|
5,584
|
Settlement of New
Markets Tax Credit transaction
|
|
—
|
|
—
|
|
—
|
|
(17,659)
|
|
—
|
Total adjustments
(pre-tax)
|
|
$
20,752
|
|
$
19,865
|
|
$ 7,288
|
|
$ (10,798)
|
|
$ 5,593
|
Related tax effects on
adjustments
|
|
(4,358)
|
|
(4,172)
|
|
(1,530)
|
|
2,268
|
|
(1,175)
|
Adjusted
earnings
|
|
$ 192,667
|
|
$ 199,859
|
|
$ 239,729
|
|
$ 171,319
|
|
$
266,192
|
Net earnings per
diluted share
|
|
$ 1.49
|
|
$
1.56
|
|
$
1.98
|
|
$
1.51
|
|
$
2.20
|
Adjusted earnings per
diluted share
|
|
1.63
|
|
1.69
|
|
2.02
|
|
1.44
|
|
2.24
|
A reconciliation of net cash flows from operating activities to
free cash flow is provided below:
|
|
Three Months
Ended
|
(in
thousands)
|
|
11/30/2023
|
Net cash flows from
operating activities
|
|
$
261,060
|
Capital
expenditures
|
|
(66,991)
|
Free cash
flow
|
|
$
194,069
|
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SOURCE CMC