IRVING, Texas, Oct. 29,
2014 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC)
today announced financial results for its fourth quarter and year
ended August 31, 2014. Net earnings attributable to CMC for
the fourth quarter ended August 31, 2014 were $34.9 million, or $0.29 per diluted share, on net sales of
$1.9 billion. This compares to net
earnings attributable to CMC of $4.1
million, or $0.03 per diluted
share, on net sales of $1.7 billion
for the three months ended August 31, 2013. For the year ended
August 31, 2014, net earnings attributable to CMC were
$115.6 million, or $0.97 per diluted share, on net sales of
$7.0 billion. This compares to net
earnings attributable to CMC of $77.3
million, or $0.66 per diluted
share, on net sales of $6.9 billion
for the year ended August 31, 2013.
Results for the fourth quarter of fiscal 2014 included after-tax
LIFO income from continuing operations of $1.0 million ($0.01
per diluted share), compared with after-tax LIFO income from
continuing operations of $10.3
million ($0.09 per diluted
share) for the fourth quarter of fiscal 2013. Adjusted operating
profit from continuing operations was $66.5
million for the fourth quarter of fiscal 2014, compared with
adjusted operating profit from continuing operations of
$36.7 million for the fourth quarter
of fiscal 2013. Adjusted operating profit for the fourth quarter of
fiscal 2013 included asset impairment charges and a full valuation
allowance of tax net operating losses related to our Australian
operations of $25.9 million. Adjusted
EBITDA from continuing operations was $102.4
million for the fourth quarter of fiscal 2014, compared with
adjusted EBITDA from continuing operations of $83.4 million for the fourth quarter of fiscal
2013.
Joe Alvarado, Chairman of the
Board, President, and CEO, commented, "We are pleased with the
results of our fourth quarter of fiscal 2014. For the full year
fiscal 2014, adjusted operating profit increased 18% over the prior
period with modest topline growth of around 2%. During fiscal 2014,
the U.S. economy showed positive signs of steady economic recovery.
Non-residential construction spending was up 6% over the prior
year, and the unemployment rate dropped 1% to an average of 6.6%
for the twelve months ended August 31,
2014. Additionally, we continued to focus on improving and
evaluating underperforming operations for their long-term
viability. As a result of our on-going evaluations, in September 2014 we decided to exit our steel
distribution business in Australia."
On October 27, 2014, the board of directors of CMC declared
a quarterly dividend of $0.12 for
stockholders of record on November 12, 2014. The
dividend will be paid on November 26, 2014. Furthermore, the
board of directors authorized a new share repurchase program under
which the Company may repurchase up to $100.0 million of CMC's outstanding common stock
from time to time for cash in open market transactions or in
privately-negotiated transactions in accordance with applicable
federal securities laws. The timing and the amount of
repurchases, if any, will be determined by the Company's management
based on its evaluation of market conditions, capital allocation
alternatives and other factors.
Business Segments - Fiscal Fourth Quarter 2014
Review
Our Americas Recycling segment recorded an adjusted
operating loss of $2.1 million for
the fourth quarter of this fiscal year, compared with an adjusted
operating loss of $6.7 million in the
prior year's fourth quarter. Ferrous and nonferrous shipments
increased 2% and 6%, respectively, during the quarter, while
average selling prices were stable when compared to the fourth
quarter of fiscal 2013. This increase in net sales coupled with a
2% decrease in average material costs for both ferrous and
nonferrous material resulted in the improvement in adjusted
operating profit for the fourth quarter of fiscal 2014 compared to
the fourth quarter of fiscal 2013.
Our Americas Mills segment recorded an adjusted operating profit
of $63.8 million for the fourth
quarter of fiscal 2014, compared with an adjusted operating profit
of $58.4 million in the fourth
quarter of fiscal 2013. The increase in adjusted operating profit
for the fourth quarter of fiscal 2014 was due to a 12% increase in
total shipments compared to the fourth quarter of fiscal 2013. This
increase in total shipments was driven by a 9% increase in
shipments of our higher margin finished products, including
reinforcement bar ("rebar") and merchants, compared to the fourth
quarter of fiscal 2013. In addition, compared to the fourth quarter
of fiscal 2013, the average selling price of our finished products
increased at a higher rate per short ton than the increase in our
finished products' average material cost, resulting in a 5%
improvement in average metal margin for the fourth quarter of
fiscal 2014. The increase in shipments and improvement in average
metal margin in the fourth quarter of fiscal 2014 were partially
offset by a $13.5 million unfavorable
change in pre-tax LIFO, from pre-tax LIFO income of $7.4 million in the fourth quarter of fiscal 2013
to pre-tax LIFO expense of $6.1
million in the fourth quarter of fiscal 2014.
Our Americas Fabrication segment recorded an adjusted operating
profit of $8.1 million for the fourth
quarter of fiscal 2014, compared with an adjusted operating profit
of $8.2 million in the fourth quarter
of fiscal 2013. Total shipments in the fourth quarter of fiscal
2014 increased 17% compared to the fourth quarter of fiscal 2013;
however, a $5 per short ton decrease
in average selling prices coupled with an increase in input cost
resulted in an 8% decline in metal margin for the fourth quarter of
fiscal 2014. This decline in metal margin in the fourth quarter of
fiscal 2014 was partially offset by a $3.1
million increase in pre-tax LIFO income, resulting in nearly
flat adjusted operating profit compared to the fourth quarter of
fiscal 2013. This segment entered fiscal 2015 with a stronger
backlog when compared to one year ago.
Our International Mill segment recorded an adjusted operating
profit of $5.0 million for the fourth
quarter of fiscal 2014, compared with an adjusted operating profit
of $8.0 million in the prior year's
fourth quarter. Average selling prices increased $14 per short ton and outpaced a 1% increase in
average material cost; however, an 11% decrease in total shipments
for the fourth quarter of fiscal 2014 drove the $3.0 million decline in adjusted operating profit
compared to the fourth quarter of fiscal 2013.
Our International Marketing and Distribution segment recorded an
adjusted operating profit of $13.2
million for the fourth quarter of fiscal 2014, compared with
an adjusted operating loss of $16.2
million in the prior year's fourth quarter. The
$29.4 million improvement in adjusted
operating profit in the fourth quarter of fiscal 2014 was primarily
the result of charges recorded in the fourth quarter of fiscal 2013
for goodwill and other asset impairments, as well as one-time exit
costs to close unprofitable locations. Our marketing and
distribution divisions headquartered in the United States reported improved results
for the fourth quarter of fiscal 2014 when compared to the prior
year's fourth quarter. However, our European trading division
continued to suffer weakened results in response to the poor
Eurozone market conditions.
Fiscal 2014 Full Year Review
Earnings from continuing
operations for fiscal year 2014 were $102.1
million, or $0.86 per diluted
share. For the year ended August 31, 2014, net cash flow
from operating activities was $136.9
million, and adjusted EBITDA from continuing operations was
$361.7 million. After-tax LIFO
expense from continuing operations for fiscal 2014 was $8.8 million ($0.07
per diluted share), compared to after-tax LIFO income from
continuing operations of $34.4
million ($0.29 per diluted
share) in fiscal 2013. As of August 31, 2014, cash and
short-term investments totaled $434.9
million, an increase of 15% from the end of our 2013 fiscal
year.
Earnings from discontinued operations for fiscal year 2014 were
$13.5 million, which primarily
consisted of earnings related to the sale of our copper tube
business in the first fiscal quarter of 2014.
Outlook
Alvarado concluded, "Heading into our fiscal
year 2015, many of our key market indicators have shown strength in
recent months. For example, the Architecture Billings Index (ABI)
was 53.0 for the month of August, following 55.8 in July, which was
the highest mark since 2007. The Eurozone economy is growing
gradually, with rising construction activity. While macroeconomic
and geopolitical concerns remain, all indications suggest continued
market growth in fiscal 2015."
Conference Call
CMC invites you to listen to a live
broadcast of its fourth quarter fiscal 2014 conference call today,
Wednesday, October 29, 2014, at 11:00
a.m. ET. Joe Alvarado,
Chairman of the Board, President and CEO, and Barbara Smith, Senior Vice President and CFO,
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 the webcast on the next business day. Financial and
statistical information presented in the broadcast are located on
CMC's website under "Investors".
Commercial Metals Company and its subsidiaries manufacture,
recycle and market steel and metal products, related materials and
services through a network including steel minimills, steel
fabrication and processing plants, construction-related product
warehouses, metal recycling facilities and marketing and
distribution offices in the United
States and in strategic international markets.
Forward-Looking Statements
This news release contains
forward-looking statements regarding CMC's expectations relating to
economic conditions and CMC's operating plans. These
forward-looking statements generally can be identified by phrases
such as we, CMC or its management, "expects," "anticipates,"
"believes," "estimates," "intends," "plans to," "ought," "could,"
"will," "should," "likely," "appears" or other similar words or
phrases. There are inherent risks and uncertainties in any
forward-looking statements. 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, CMC
undertakes no obligation to update, amend or clarify any
forward-looking statements to reflect events, new information or
otherwise.
Factors that could cause actual results to differ materially
from CMC's expectations include the following: absence of global
economic recovery or possible recession relapse and the pace of
overall global economic activity and its impact in a highly
cyclical industry; construction activity or lack thereof; continued
sovereign debt problems in the Euro-zone; success or failure of
governmental efforts to stimulate the economy including restoring
credit availability and confidence in a recovery; significant
reductions in China's steel
consumption or increased Chinese steel production; rapid and
significant changes in the price of metals; increased capacity and
product availability from competing steel minimills and other steel
suppliers including import quantities and pricing; passage of new,
or interpretation of existing, environmental laws and regulations;
increased legislation associated with climate change and greenhouse
gas emissions; solvency of financial institutions and their ability
or willingness to lend; customers' inability to obtain credit and
non-compliance with contracts; financial covenants and restrictions
on the operation of our business contained in agreements governing
our debt; currency fluctuations; global factors including political
and military uncertainties; availability of electricity and natural
gas for minimill operations; information technology interruptions
and breaches in security data; ability to retain key executives;
execution of cost reduction strategies; industry consolidation or
changes in production capacity or utilization; ability to make
necessary capital expenditures; availability and pricing of raw
materials over which we exert little influence, including scrap
metal, energy, insurance and supply prices; unexpected equipment
failures; competition from other materials; losses or limited
potential gains due to hedging transactions; litigation claims and
settlements, court decisions and regulatory rulings; risk of injury
or death to employees, customers or other visitors to our
operations; and increased costs related to health care reform
legislation.
COMMERCIAL METALS
COMPANY
OPERATING
STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
(short tons in
thousands)
|
08/31/14
|
|
08/31/13
|
|
08/31/14
|
|
08/31/13
|
Americas Recycling
tons shipped
|
601
|
|
|
588
|
|
|
2,329
|
|
|
2,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Steel Mills
rebar shipments
|
422
|
|
|
381
|
|
|
1,577
|
|
|
1,447
|
|
Americas Steel Mills
structural and other shipments
|
310
|
|
|
272
|
|
|
1,196
|
|
|
1,114
|
|
Total Americas
Steel Mills tons shipped
|
732
|
|
|
653
|
|
|
2,773
|
|
|
2,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Steel Mills
average FOB selling price (total sales)
|
$
|
684
|
|
|
$
|
656
|
|
|
$
|
675
|
|
|
$
|
669
|
|
Americas Steel Mills
average cost ferrous scrap utilized
|
$
|
344
|
|
|
$
|
330
|
|
|
$
|
348
|
|
|
$
|
343
|
|
Americas Steel
Mills metal margin
|
$
|
340
|
|
|
$
|
326
|
|
|
$
|
327
|
|
|
$
|
326
|
|
Americas Steel Mills
average ferrous scrap purchase price
|
$
|
298
|
|
|
$
|
290
|
|
|
$
|
305
|
|
|
$
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Mill
tons shipped
|
332
|
|
|
371
|
|
|
1,285
|
|
|
1,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Mill
average FOB selling price (total sales)
|
$
|
581
|
|
|
$
|
567
|
|
|
$
|
605
|
|
|
$
|
589
|
|
International Mill
average cost ferrous scrap utilized
|
$
|
337
|
|
|
$
|
333
|
|
|
$
|
351
|
|
|
$
|
360
|
|
International Mill
metal margin
|
$
|
244
|
|
|
$
|
234
|
|
|
$
|
254
|
|
|
$
|
229
|
|
International Mill
average ferrous scrap purchase price
|
$
|
275
|
|
|
$
|
267
|
|
|
$
|
297
|
|
|
$
|
289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
rebar shipments
|
285
|
|
|
239
|
|
|
988
|
|
|
902
|
|
Americas Fabrication
structural and post shipments
|
38
|
|
|
37
|
|
|
152
|
|
|
152
|
|
Total Americas
Fabrication tons shipped
|
323
|
|
|
276
|
|
|
1,140
|
|
|
1,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
average selling price (excluding stock and buyout sales)
|
$
|
933
|
|
|
$
|
938
|
|
|
$
|
928
|
|
|
$
|
943
|
|
|
(in
thousands)
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
Net
sales
|
08/31/14
|
|
08/31/13
|
|
08/31/14
|
|
08/31/13
|
Americas
Recycling
|
$
|
351,496
|
|
|
$
|
346,671
|
|
|
$
|
1,367,070
|
|
|
$
|
1,391,749
|
|
Americas
Mills
|
525,760
|
|
|
465,433
|
|
|
1,991,334
|
|
|
1,819,520
|
|
Americas
Fabrication
|
443,952
|
|
|
384,333
|
|
|
1,537,485
|
|
|
1,442,691
|
|
International
Mill
|
205,123
|
|
|
223,460
|
|
|
823,193
|
|
|
826,044
|
|
International
Marketing and Distribution
|
639,502
|
|
|
503,244
|
|
|
2,326,512
|
|
|
2,355,572
|
|
Corporate and
Eliminations
|
(262,637)
|
|
|
(224,280)
|
|
|
(1,005,635)
|
|
|
(946,001)
|
|
Total net
sales
|
$
|
1,903,196
|
|
|
$
|
1,698,861
|
|
|
$
|
7,039,959
|
|
|
$
|
6,889,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit (loss)
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Recycling
|
$
|
(2,113)
|
|
|
$
|
(6,722)
|
|
|
$
|
(3,222)
|
|
|
$
|
3,170
|
|
Americas
Mills
|
63,764
|
|
|
58,431
|
|
|
247,703
|
|
|
204,333
|
|
Americas
Fabrication
|
8,065
|
|
|
8,154
|
|
|
6,196
|
|
|
28,033
|
|
International
Mill
|
4,985
|
|
|
7,998
|
|
|
30,632
|
|
|
890
|
|
International
Marketing and Distribution
|
13,213
|
|
|
(16,220)
|
|
|
17,757
|
|
|
35,617
|
|
Corporate and
Eliminations
|
(21,397)
|
|
|
(14,987)
|
|
|
(72,649)
|
|
|
(65,605)
|
|
Adjusted operating
profit from continuing operations
|
66,517
|
|
|
36,654
|
|
|
226,417
|
|
|
206,438
|
|
Adjusted operating
profit (loss) from discontinued operations
|
(520)
|
|
|
429
|
|
|
22,009
|
|
|
3,672
|
|
Adjusted operating
profit
|
$
|
65,997
|
|
|
$
|
37,083
|
|
|
$
|
248,426
|
|
|
$
|
210,110
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
(in thousands,
except share data)
|
08/31/14
|
|
08/31/13
|
|
08/31/14
|
|
08/31/13
|
Net sales
|
$
|
1,903,196
|
|
|
$
|
1,698,861
|
|
|
$
|
7,039,959
|
|
|
$
|
6,889,575
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
1,717,118
|
|
|
1,538,073
|
|
|
6,344,300
|
|
|
6,227,238
|
|
Selling, general and
administrative expenses
|
118,531
|
|
|
111,070
|
|
|
469,934
|
|
|
468,611
|
|
Impairment of
assets
|
2,271
|
|
|
13,836
|
|
|
3,173
|
|
|
17,270
|
|
Gain on sale of cost
method investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,088)
|
|
Interest
expense
|
19,985
|
|
|
18,051
|
|
|
77,741
|
|
|
69,608
|
|
|
1,857,905
|
|
|
1,681,030
|
|
|
6,895,148
|
|
|
6,756,639
|
|
Earnings from
continuing operations before income taxes
|
45,291
|
|
|
17,831
|
|
|
144,811
|
|
|
132,936
|
|
Income
taxes
|
10,067
|
|
|
14,103
|
|
|
42,724
|
|
|
57,979
|
|
Earnings from
continuing operations
|
35,224
|
|
|
3,728
|
|
|
102,087
|
|
|
74,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) from discontinued operations before income
taxes
|
(520)
|
|
|
429
|
|
|
22,009
|
|
|
3,672
|
|
Income taxes
(benefit)
|
(222)
|
|
|
97
|
|
|
8,544
|
|
|
1,310
|
|
Earnings (loss) from
discontinued operations
|
(298)
|
|
|
332
|
|
|
13,465
|
|
|
2,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
34,926
|
|
|
4,060
|
|
|
115,552
|
|
|
77,319
|
|
Less net
earnings attributable to noncontrolling interests
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
Net earnings
attributable to CMC
|
$
|
34,926
|
|
|
$
|
4,057
|
|
|
$
|
115,551
|
|
|
$
|
77,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share attributable to CMC:
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.29
|
|
|
$
|
0.03
|
|
|
$
|
0.87
|
|
|
$
|
0.64
|
|
Earnings (loss) from
discontinued operations
|
—
|
|
|
—
|
|
|
0.11
|
|
|
0.02
|
|
Net
earnings
|
$
|
0.29
|
|
|
$
|
0.03
|
|
|
$
|
0.98
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share attributable to CMC:
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$
|
0.29
|
|
|
$
|
0.03
|
|
|
$
|
0.86
|
|
|
$
|
0.64
|
|
Earnings (loss) from
discontinued operations
|
—
|
|
|
—
|
|
|
0.11
|
|
|
0.02
|
|
Net
earnings
|
$
|
0.29
|
|
|
$
|
0.03
|
|
|
$
|
0.97
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.48
|
|
|
$
|
0.48
|
|
Average basic shares
outstanding
|
117,784,487
|
|
|
116,943,198
|
|
|
117,496,270
|
|
|
116,677,836
|
|
Average diluted
shares outstanding
|
118,862,975
|
|
|
117,841,538
|
|
|
118,607,106
|
|
|
117,552,952
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(in
thousands)
|
August 31,
2014
|
|
August 31,
2013
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
434,925
|
|
|
$
|
378,770
|
|
Accounts receivable,
net
|
1,028,425
|
|
|
989,694
|
|
Inventories,
net
|
935,411
|
|
|
757,417
|
|
Current deferred tax
assets
|
49,455
|
|
|
76,994
|
|
Other
|
105,575
|
|
|
163,320
|
|
Total current
assets
|
2,553,791
|
|
|
2,366,195
|
|
Net property, plant
and equipment
|
925,098
|
|
|
940,237
|
|
Goodwill
|
74,319
|
|
|
69,579
|
|
Other
assets
|
135,312
|
|
|
118,790
|
|
Total
assets
|
$
|
3,688,520
|
|
|
$
|
3,494,801
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable-trade
|
$
|
423,807
|
|
|
$
|
342,678
|
|
Accounts
payable-documentary letters of credit
|
125,053
|
|
|
112,281
|
|
Accrued expenses and
other payables
|
322,000
|
|
|
314,949
|
|
Notes
payable
|
12,288
|
|
|
5,973
|
|
Current maturities of
long-term debt
|
8,005
|
|
|
5,228
|
|
Total current
liabilities
|
891,153
|
|
|
781,109
|
|
Deferred income
taxes
|
55,600
|
|
|
46,558
|
|
Other long-term
liabilities
|
112,134
|
|
|
118,165
|
|
Long-term
debt
|
1,281,042
|
|
|
1,278,814
|
|
Total
liabilities
|
2,339,929
|
|
|
2,224,646
|
|
Stockholders' equity
attributable to CMC
|
1,348,480
|
|
|
1,269,999
|
|
Stockholders' equity
attributable to noncontrolling interests
|
111
|
|
|
156
|
|
Total
equity
|
1,348,591
|
|
|
1,270,155
|
|
Total liabilities and
stockholders' equity
|
$
|
3,688,520
|
|
|
$
|
3,494,801
|
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
Fiscal Year
Ended
|
(in
thousands)
|
08/31/14
|
|
08/31/13
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
|
Net
earnings
|
$
|
115,552
|
|
|
$
|
77,319
|
|
Adjustments to
reconcile net earnings to cash flows from (used by) operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
136,004
|
|
|
136,548
|
|
Provision for
losses on receivables, net
|
(1,760)
|
|
|
4,430
|
|
Stock-based
compensation
|
18,051
|
|
|
18,693
|
|
Amortization of
interest rate swaps termination gain
|
(7,597)
|
|
|
(12,470)
|
|
Loss on debt
extinguishment
|
—
|
|
|
4,758
|
|
Deferred income
taxes
|
32,348
|
|
|
54,655
|
|
Tax expense from
stock-based plans
|
4,426
|
|
|
1,444
|
|
Net gain on sale
of a subsidiary, cost method investment and other
|
(31,356)
|
|
|
(25,371)
|
|
Write-down of
inventory
|
4,000
|
|
|
3,003
|
|
Asset
impairments
|
3,498
|
|
|
17,270
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
(143,397)
|
|
|
11,065
|
|
Accounts receivable
sold, net
|
120,957
|
|
|
(80,580)
|
|
Inventories
|
(177,331)
|
|
|
26,459
|
|
Other
assets
|
(20,516)
|
|
|
2,894
|
|
Accounts payable,
accrued expenses and other payables
|
90,604
|
|
|
(87,375)
|
|
Other long-term
liabilities
|
(6,543)
|
|
|
(5,010)
|
|
Net cash flows from
operating activities
|
136,940
|
|
|
147,732
|
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
|
Capital
expenditures
|
(101,749)
|
|
|
(89,035)
|
|
Proceeds from the
sale of property, plant and equipment and other
|
17,572
|
|
|
13,904
|
|
Proceeds from the
sale of subsidiaries
|
52,609
|
|
|
—
|
|
Proceeds from the
sale of cost method investment
|
—
|
|
|
28,995
|
|
Acquisitions, net of
cash acquired
|
(15,693)
|
|
|
—
|
|
Net cash flows used
by investing activities
|
(47,261)
|
|
|
(46,136)
|
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
|
Increase
(decrease) in documentary letters of credit
|
11,753
|
|
|
(6,221)
|
|
Short-term
borrowings, net change
|
6,315
|
|
|
(19,524)
|
|
Repayments on
long-term debt
|
(7,677)
|
|
|
(204,856)
|
|
Proceeds from
issuance of long-term debt
|
—
|
|
|
330,000
|
|
Payments for debt
issuance costs
|
(431)
|
|
|
(4,684)
|
|
Debt extinguishment
costs
|
—
|
|
|
(4,557)
|
|
Decrease (increase)
in restricted cash
|
18,000
|
|
|
(18,620)
|
|
Stock issued under
incentive and purchase plans, net of forfeitures
|
(1,488)
|
|
|
951
|
|
Cash
dividends
|
(56,428)
|
|
|
(56,028)
|
|
Tax expense from
stock-based plans
|
(4,426)
|
|
|
(1,444)
|
|
Contribution from
(purchase of) noncontrolling interests
|
(15)
|
|
|
13
|
|
Net cash flows from
(used by) financing activities
|
(34,397)
|
|
|
15,030
|
|
Effect of exchange
rate changes on cash
|
873
|
|
|
(278)
|
|
Increase in cash and
cash equivalents
|
56,155
|
|
|
116,348
|
|
Cash and cash
equivalents at beginning of year
|
378,770
|
|
|
262,422
|
|
Cash and cash
equivalents at end of year
|
$
|
434,925
|
|
|
$
|
378,770
|
|
COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
(dollars in thousands)
This press release contains financial measures not derived in
accordance with generally accepted accounting principles ("GAAP").
Reconciliations to the most comparable GAAP measures are provided
below.
Adjusted Operating Profit is a non-GAAP financial
measure. Management uses adjusted operating profit to evaluate the
financial performance of CMC. Adjusted operating profit from
continuing operations is the sum of our earnings from continuing
operations before income taxes, interest expense and discounts on
sales of accounts receivable. Adjusted operating profit is the sum
of adjusted operating profit from continuing operations and
adjusted operating profit from discontinued operations. For added
flexibility, we may sell certain accounts receivable both in the
U.S. and internationally. We consider sales of receivables as an
alternative source of liquidity to finance our operations and we
believe that removing these costs provides a clearer perspective of
CMC's operating performance. Adjusted operating profit may be
inconsistent with similar measures presented by other
companies.
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
(in
thousands)
|
08/31/14
|
|
08/31/13
|
|
08/31/14
|
|
08/31/13
|
Earnings from
continuing operations
|
$
|
35,224
|
|
|
$
|
3,728
|
|
|
$
|
102,087
|
|
|
$
|
74,957
|
|
Income
taxes
|
10,067
|
|
|
14,103
|
|
|
42,724
|
|
|
57,979
|
|
Interest
expense
|
19,985
|
|
|
18,051
|
|
|
77,741
|
|
|
69,608
|
|
Discounts on sales of
accounts receivable
|
1,241
|
|
|
772
|
|
|
3,865
|
|
|
3,894
|
|
Adjusted operating
profit from continuing operations
|
66,517
|
|
|
36,654
|
|
|
226,417
|
|
|
206,438
|
|
Adjusted operating
profit (loss) from discontinued operations
|
(520)
|
|
|
429
|
|
|
22,009
|
|
|
3,672
|
|
Adjusted operating
profit
|
$
|
65,997
|
|
|
$
|
37,083
|
|
|
$
|
248,426
|
|
|
$
|
210,110
|
|
Adjusted EBITDA is a non-GAAP financial measure. Adjusted
EBITDA from continuing operations is the sum of our earnings from
continuing operations before net earnings attributable to
noncontrolling interests, outside financing costs and income taxes.
It also excludes CMC's largest recurring non-cash charge,
depreciation and amortization, as well as impairment charges, which
are also non-cash. Adjusted EBITDA is the sum of adjusted EBITDA
from continuing operations and adjusted EBITDA from discontinued
operations. Adjusted EBITDA should not be considered as an
alternative to net earnings or as a better measure of liquidity
than net cash flows from operating activities, as determined by
GAAP. However, we believe that adjusted EBITDA provides relevant
and useful information, which is often used by analysts, creditors,
and other interested parties in our industry. Adjusted EBITDA to
interest expense is a covenant test in certain of CMC's debt
agreements. Adjusted EBITDA is also the target benchmark for our
annual and long-term cash incentive performance plans for
management. Adjusted EBITDA may be inconsistent with similar
measures presented by other companies.
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
(in
thousands)
|
08/31/14
|
|
08/31/13
|
|
08/31/14
|
|
08/31/13
|
Earnings from
continuing operations
|
$
|
35,224
|
|
|
$
|
3,728
|
|
|
$
|
102,087
|
|
|
$
|
74,957
|
|
Less: Net earnings
attributable to noncontrolling interests
|
—
|
|
|
3
|
|
|
1
|
|
|
4
|
|
Interest
expense
|
19,985
|
|
|
18,051
|
|
|
77,741
|
|
|
69,608
|
|
Income
taxes
|
10,067
|
|
|
14,103
|
|
|
42,724
|
|
|
57,979
|
|
Depreciation and
amortization
|
34,874
|
|
|
33,703
|
|
|
136,004
|
|
|
133,732
|
|
Impairment
charges
|
2,271
|
|
|
13,836
|
|
|
3,173
|
|
|
17,270
|
|
Adjusted EBITDA from
continuing operations
|
102,421
|
|
|
83,418
|
|
|
361,728
|
|
|
353,542
|
|
Adjusted EBITDA from
discontinued operations
|
(520)
|
|
|
1,109
|
|
|
22,334
|
|
|
6,487
|
|
Adjusted
EBITDA
|
$
|
101,901
|
|
|
$
|
84,527
|
|
|
$
|
384,062
|
|
|
$
|
360,029
|
|
Adjusted EBITDA to interest coverage:
Three Months Ended
August 31, 2014
|
|
Year Ended August
31, 2014
|
$101,901
|
/
|
19,985
|
|
=
|
5.1
|
|
|
$384,062
|
/
|
77,741
|
|
=
|
4.9
|
Total Capitalization:
Total capitalization is the sum of stockholders' equity
attributable to CMC, long-term debt and deferred income taxes. The
ratio of debt to total capitalization is a measure of current debt
leverage. The following reconciles total capitalization to the most
comparable GAAP measure, stockholders' equity attributable to
CMC:
(in
thousands)
|
August 31,
2014
|
Stockholders' equity
attributable to
CMC
|
$
|
1,348,480
|
Long-term
debt
|
1,281,042
|
Deferred income
taxes
|
55,600
|
Total
capitalization
|
$
|
2,685,122
|
OTHER FINANCIAL INFORMATION
Long-term debt to total
capitalization ratio as of August 31, 2014:
$1,281,042
|
/
|
$2,685,122
|
=
|
47.7%
|
Total debt to total capitalization plus short-term debt plus
notes payable ratio as of August 31, 2014:
(
|
$1,281,042
|
+
|
$8,005
|
+
|
$
|
12,288
|
)
|
/
|
(
|
$2,685,122
|
+
|
$8,005
|
+
|
$
|
12,288
|
)
|
=
|
48.1%
|
Current ratio as of August 31, 2014:
Current
assets divided by current liabilities
$2,553,791
|
/
|
$891,153
|
=
|
2.9
|
SOURCE Commercial Metals Company