IRVING, Texas, June 21,
2018 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC)
today announced financial results for its third fiscal quarter
ended May 31, 2018. Earnings from continuing operations
were $42.3 million ($0.36 per diluted share) for the third quarter of
2018, on net sales of $1.2 billion.
Adjusted earnings from continuing operations were $49.0 million ($0.41 per diluted share) as detailed in the
Non-GAAP reconciliation on page 11. This compares to earnings
from continuing operations and adjusted earnings from continuing
operations of $31.6 million
($0.27 per diluted share), on net
sales of $1.0 billion for the third
quarter of 2017. For the nine months ended May 31, 2018,
earnings from continuing operations were $84.0 million, compared to $60.2 million for the same period of the prior
year.
Barbara R. Smith, Chairman of the
Board, President and Chief Executive Officer, commented, "The CMC
team delivered outstanding results in our third fiscal
quarter. In fact, adjusted EBITDA from continuing operations
was the highest since the financial crisis and improved by 56% in
comparison to our second quarter of 2018. Strong demand across all
of our segments was a principal driver of the improved
results. Additionally, the start-up of our new micro mill in
Durant, Oklahoma contributed to
the improved results as we increased shipments from this facility
during the quarter. We look forward to this increased
capacity helping to better serve our customers with a high quality
differentiated product during this period of strong demand."
The Company's liquidity position at May 31, 2018 remained
strong with cash and cash equivalents of $600.4 million and availability under the
Company's credit and accounts receivable sales facilities of
approximately $614.8 million. The
cash on hand includes the proceeds received from the issuance of
$350 million of 5.75% of Senior Notes
due 2026 completed on May 3,
2018. The proceeds from the Senior Notes due 2026, together
with cash on hand and the delayed draw term loan under the
Company's credit agreement are expected to be used to finance the
previously announced acquisition of certain rebar assets from
Gerdau S.A., once the transaction closes.
On June 20, 2018, the board of directors of CMC declared a
quarterly dividend of $0.12 per share
for shareholders of record on July 5, 2018. The dividend
will be paid on July 19, 2018.
Business Segments-Fiscal Third Quarter 2018 Review
Our
Americas Recycling segment recorded adjusted operating profit of
$14.4 million for the third quarter
of 2018, compared to an adjusted operating profit of $9.2 million for the third quarter of 2017. This
was the highest level of profitability in this segment since the
third quarter of fiscal 2011. The improvement in adjusted
operating profit compared to the same period in the prior year was
primarily the result of strong volumes and rising prices in both
ferrous and nonferrous markets. Ferrous and nonferrous
prices have increased approximately 19% and 12%, respectively, from
the same period of the prior year.
Our Americas Mills segment recorded adjusted operating profit of
$70.4 million for the third quarter
of 2018 compared to adjusted operating profit of $50.7 million for the corresponding period in
fiscal 2017. We had a very strong shipping quarter as construction
activity remains robust while import levels retreated in comparison
to prior years. Shipments increased 12% and metal margins
increased by $29 per ton from the
same period of the prior year. Included in the segment
results were expenses of $6.5 million
related to the start-up activities of the Durant, Oklahoma micro mill offset by
$3.0 million of incentives that were
recorded as income during the quarter. These compare to
pre-start up costs of $8.7 million
recorded during the second quarter of fiscal 2018.
Manufacturing costs at our facilities benefited from high levels of
production, which resulted in reductions of $11 per ton in comparison to our fiscal second
quarter of 2018 and $4 per ton
compared to the same period of the prior fiscal year.
Our Americas Fabrication segment recorded an adjusted operating
loss of $16.1 million for the third
quarter of 2018 compared to adjusted operating profit of
$1.8 million for the third quarter of
fiscal 2017. Due to the integrated nature of our
business and internal market based transfer prices, as rebar prices
have risen over the past six months, our Americas Mill segment has
experienced margin expansion on rebar shipped internally to our
rebar fabrication shops, while the Americas Fabrication segment has
incurred margin compression as it services its mostly fixed price
backlog of contract work. However, rebar fabrication bidding
activity remains strong. While the average selling price of
material shipped remained relatively flat, the average price
associated with new contracts rose almost $100 per ton in comparison to the fiscal second
quarter of 2018. Also during the third quarter of 2018, the
Company completed the sale of its structural fabrication
business.
Our International Mill segment in Poland recorded adjusted operating profit of
$24.4 million for the third quarter
of 2018, compared to adjusted operating profit of $13.0 million for the corresponding period in
2017. Long steel product demand remains strong, and selling
prices at this operation have increased significantly in comparison
to the same period of the prior fiscal year. In addition, the
focus on producing a broader range of higher value merchant
products resulted in a significant improvement in margins.
Shipment volumes decreased during the quarter due to higher rebar
import levels into Poland.
Outlook
"We are confident in our outlook of continued
strong results for CMC," said Smith. "Leading indicators of
macroeconomic and market conditions in both the United States and Poland suggest continuing economic growth and
strong long steel product demand. In addition, we applaud the
U.S. trade measures implemented by the President and believe they
will assist in creating a fair and level playing field."
Conference Call
CMC invites you to listen to a live
broadcast of its third quarter of 2018 conference call today,
Thursday, June 21, 2018, at 11:00 a.m.
ET. Barbara R. Smith,
Chairman of the Board, President and Chief Executive Officer, and
Mary A. Lindsey, 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,
including any non-GAAP disclosures, presented in the broadcast are
located on CMC's website under "Investors."
About Commercial Metals Company
Commercial Metals
Company and its subsidiaries manufacture, recycle and market steel
and metal products, related materials and services through a
network of facilities that includes four electric arc furnace
("EAF") mini mills, two EAF micro mills, a rerolling mill, steel
fabrication and processing plants, construction-related product
warehouses, and metal recycling facilities in the United States and Poland.
Forward-Looking Statements
This news release contains
forward-looking statements regarding CMC's expectations relating to
general economic conditions, key macro-economic drivers that impact
its business including demand, steel margins, effects of the
ongoing trade actions in the U.S. and Poland, and the planned acquisition of
substantially all of the U.S. rebar fabrication facilities and the
steel mini-mills located in or around Rancho Cucamonga, California, Jacksonville, Florida, Sayreville, New Jersey and Knoxville, Tennessee currently owned by Gerdau
S.A. and certain of its subsidiaries (collectively, the "Business")
and the timing thereof, the ability to obtain regulatory approvals
and meet other closing conditions for the planned acquisition of
the Business. 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," "potential," "outlook," 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 changed assumptions, the
occurrence of anticipated or unanticipated events, new information
or circumstances or otherwise.
Factors that could cause actual results to differ materially
from CMC's expectations include 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; excess capacity in our industry,
particularly in China, and product
availability from competing steel mills and other steel suppliers
including import quantities and pricing; compliance with and
changes in environmental laws and regulations, including increased
regulation associated with climate change and greenhouse gas
emissions; potential limitations in our or our customers' abilities
to access credit and non-compliance by our customers with our
contracts; financial covenants and restrictions on the operation of
our business contained in agreements governing our debt; 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; failure to retain key management and employees of
the Business; issues or delays in the successful integration of the
Business' operations with those of the Company, including incurring
or experiencing unanticipated costs and/or delays or difficulties;
difficulties or delays in the successful transition of the Business
to the information technology systems of the Company as well as
risks associated with other integration or transition of the
operations, systems and personnel of the Business; future levels of
revenues being lower than expected and costs being higher than
expected; failure or inability to implement growth strategies in a
timely manner; unfavorable reaction to the acquisition of the
Business by customers, competitors, suppliers and employees;
currency fluctuations; global factors, including political
uncertainties and military conflicts; availability of electricity,
electrodes and natural gas for mill operations; information
technology interruptions and breaches in data security; ability to
hire and retain key executives and other employees; our 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 or from competitors that
have a lower cost structure or access to greater financial
resources; 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;
increased costs related to health care reform legislation; and
impacts from the Tax Cuts and Jobs Act.
COMMERCIAL METALS
COMPANY FINANCIAL &
OPERATING STATISTICS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in thousands
except per ton amounts)
|
|
5/31/2018
|
|
2/28/2018
|
|
11/30/2017
|
|
8/31/2017
|
|
5/31/2017
|
|
5/31/2018
|
|
5/31/2017
|
AMERICAS
RECYCLING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
364,098
|
|
|
$
|
320,627
|
|
|
$
|
319,341
|
|
|
$
|
317,300
|
|
|
$
|
294,166
|
|
|
$
|
1,004,066
|
|
|
$
|
694,202
|
|
Adjusted
operating profit
|
|
$
|
14,350
|
|
|
$
|
12,238
|
|
|
$
|
9,992
|
|
|
$
|
2,931
|
|
|
$
|
9,247
|
|
|
$
|
36,580
|
|
|
$
|
11,981
|
|
Tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrous
|
|
642
|
|
|
560
|
|
|
589
|
|
|
583
|
|
|
590
|
|
|
1,791
|
|
|
1,416
|
|
Nonferrous
|
|
65
|
|
|
63
|
|
|
66
|
|
|
70
|
|
|
61
|
|
|
194
|
|
|
163
|
|
Total
|
|
707
|
|
|
623
|
|
|
655
|
|
|
653
|
|
|
651
|
|
|
1,985
|
|
|
1,579
|
|
Average selling
price (per short ton)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrous
|
|
$
|
314
|
|
|
$
|
285
|
|
|
$
|
257
|
|
|
$
|
255
|
|
|
$
|
264
|
|
|
$
|
286
|
|
|
$
|
236
|
|
Nonferrous
|
|
$
|
2,252
|
|
|
$
|
2,345
|
|
|
$
|
2,208
|
|
|
$
|
2,134
|
|
|
$
|
2,017
|
|
|
$
|
2,267
|
|
|
$
|
1,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAS
MILLS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
553,063
|
|
|
$
|
425,887
|
|
|
$
|
413,518
|
|
|
$
|
414,419
|
|
|
$
|
427,276
|
|
|
$
|
1,392,468
|
|
|
$
|
1,151,034
|
|
Adjusted
operating profit
|
|
$
|
70,404
|
|
|
$
|
31,471
|
|
|
$
|
40,764
|
|
|
$
|
29,803
|
|
|
$
|
50,734
|
|
|
$
|
142,639
|
|
|
$
|
139,002
|
|
Short tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
503
|
|
|
405
|
|
|
405
|
|
|
445
|
|
|
444
|
|
|
1,313
|
|
|
1,248
|
|
Merchant &
other
|
|
308
|
|
|
279
|
|
|
272
|
|
|
265
|
|
|
278
|
|
|
859
|
|
|
767
|
|
Average price
(per short ton)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling
price
|
|
$
|
632
|
|
|
$
|
571
|
|
|
$
|
550
|
|
|
$
|
537
|
|
|
$
|
540
|
|
|
$
|
587
|
|
|
$
|
522
|
|
Cost of ferrous scrap
utilized
|
|
$
|
329
|
|
|
$
|
288
|
|
|
$
|
256
|
|
|
$
|
257
|
|
|
$
|
266
|
|
|
$
|
293
|
|
|
$
|
239
|
|
Metal
margin
|
|
$
|
303
|
|
|
$
|
283
|
|
|
$
|
294
|
|
|
$
|
280
|
|
|
$
|
274
|
|
|
$
|
294
|
|
|
$
|
283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERICAS
FABRICATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
378,241
|
|
|
$
|
312,973
|
|
|
$
|
332,779
|
|
|
$
|
353,725
|
|
|
$
|
379,976
|
|
|
$
|
1,023,993
|
|
|
$
|
1,022,202
|
|
Adjusted
operating profit (loss)
|
|
$
|
(16,096)
|
|
|
$
|
(27,117)
|
|
|
$
|
(4,782)
|
|
|
$
|
(4,928)
|
|
|
$
|
1,808
|
|
|
$
|
(47,995)
|
|
|
$
|
9,025
|
|
Total short
tons shipped
|
|
302
|
|
|
241
|
|
|
264
|
|
|
286
|
|
|
310
|
|
|
808
|
|
|
836
|
|
Total selling
price (per short ton)
|
|
$
|
777
|
|
|
$
|
799
|
|
|
$
|
778
|
|
|
$
|
773
|
|
|
$
|
775
|
|
|
$
|
784
|
|
|
$
|
772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
MILL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
201,737
|
|
|
$
|
211,765
|
|
|
$
|
220,478
|
|
|
$
|
200,239
|
|
|
$
|
167,639
|
|
|
$
|
633,980
|
|
|
$
|
437,034
|
|
Adjusted
operating profit
|
|
$
|
24,370
|
|
|
$
|
24,490
|
|
|
$
|
23,437
|
|
|
$
|
14,620
|
|
|
$
|
12,971
|
|
|
$
|
72,297
|
|
|
$
|
32,517
|
|
Short tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
79
|
|
|
95
|
|
|
140
|
|
|
129
|
|
|
107
|
|
|
314
|
|
|
333
|
|
Merchant &
other
|
|
241
|
|
|
251
|
|
|
260
|
|
|
266
|
|
|
247
|
|
|
752
|
|
|
650
|
|
Average price
(per short ton)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling
price
|
|
$
|
599
|
|
|
$
|
578
|
|
|
$
|
517
|
|
|
$
|
476
|
|
|
$
|
443
|
|
|
$
|
562
|
|
|
$
|
415
|
|
Cost of ferrous scrap utilized
|
|
$
|
329
|
|
|
$
|
324
|
|
|
$
|
296
|
|
|
$
|
269
|
|
|
$
|
253
|
|
|
$
|
317
|
|
|
$
|
229
|
|
Metal
margin
|
|
$
|
270
|
|
|
$
|
254
|
|
|
$
|
221
|
|
|
$
|
207
|
|
|
$
|
190
|
|
|
$
|
245
|
|
|
$
|
186
|
|
COMMERCIAL METALS
COMPANY BUSINESS
SEGMENTS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
thousands)
|
|
5/31/2018
|
|
2/28/2018
|
|
11/30/2017
|
|
8/31/2017
|
|
5/31/2017
|
|
5/31/2018
|
|
5/31/2017
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Recycling
|
|
$
|
364,098
|
|
|
$
|
320,627
|
|
|
$
|
319,341
|
|
|
$
|
317,300
|
|
|
$
|
294,166
|
|
|
$
|
1,004,066
|
|
|
$
|
694,202
|
|
Americas
Mills
|
|
553,063
|
|
|
425,887
|
|
|
413,518
|
|
|
414,419
|
|
|
427,276
|
|
|
1,392,468
|
|
|
1,151,034
|
|
Americas
Fabrication
|
|
378,241
|
|
|
312,973
|
|
|
332,779
|
|
|
353,725
|
|
|
379,976
|
|
|
1,023,993
|
|
|
1,022,202
|
|
International
Mill
|
|
201,737
|
|
|
211,765
|
|
|
220,478
|
|
|
200,239
|
|
|
167,639
|
|
|
633,980
|
|
|
437,034
|
|
Corporate and
Other
|
|
2,725
|
|
|
4,450
|
|
|
4,699
|
|
|
67,562
|
|
|
8,289
|
|
|
11,874
|
|
|
51,690
|
|
Eliminations
|
|
(295,380)
|
|
|
(221,434)
|
|
|
(214,282)
|
|
|
(269,115)
|
|
|
(232,633)
|
|
|
(731,096)
|
|
|
(596,223)
|
|
Total net
sales
|
|
$
|
1,204,484
|
|
|
$
|
1,054,268
|
|
|
$
|
1,076,533
|
|
|
$
|
1,084,130
|
|
|
$
|
1,044,713
|
|
|
$
|
3,335,285
|
|
|
$
|
2,759,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit (loss) from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
Recycling
|
|
$
|
14,350
|
|
|
$
|
12,238
|
|
|
$
|
9,992
|
|
|
$
|
2,931
|
|
|
$
|
9,247
|
|
|
$
|
36,580
|
|
|
$
|
11,981
|
|
Americas
Mills
|
|
70,404
|
|
|
31,471
|
|
|
40,764
|
|
|
29,803
|
|
|
50,734
|
|
|
142,639
|
|
|
139,002
|
|
Americas
Fabrication
|
|
(16,096)
|
|
|
(27,117)
|
|
|
(4,782)
|
|
|
(4,928)
|
|
|
1,808
|
|
|
(47,995)
|
|
|
9,025
|
|
International
Mill
|
|
24,370
|
|
|
24,490
|
|
|
23,437
|
|
|
14,620
|
|
|
12,971
|
|
|
72,297
|
|
|
32,517
|
|
Corporate and
Other
|
|
(22,678)
|
|
|
(22,296)
|
|
|
(20,674)
|
|
|
(12,384)
|
|
|
(20,281)
|
|
|
(65,648)
|
|
|
(72,176)
|
|
Eliminations
|
|
(2,941)
|
|
|
100
|
|
|
(1,572)
|
|
|
(39,922)
|
|
|
772
|
|
|
(4,413)
|
|
|
(22)
|
|
Adjusted operating
profit from continuing operations
|
|
$
|
67,409
|
|
|
$
|
18,886
|
|
|
$
|
47,165
|
|
|
$
|
(9,880)
|
|
|
$
|
55,251
|
|
|
$
|
133,460
|
|
|
$
|
120,327
|
|
COMMERCIAL METALS
COMPANY CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(in thousands,
except share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net sales
|
|
$
|
1,204,484
|
|
|
$
|
1,044,713
|
|
|
$
|
3,335,285
|
|
|
$
|
2,759,939
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
1,035,914
|
|
|
896,277
|
|
|
2,896,531
|
|
|
2,357,867
|
|
Selling, general and
administrative expenses
|
|
101,422
|
|
|
93,415
|
|
|
306,009
|
|
|
282,384
|
|
Interest
expense
|
|
11,511
|
|
|
12,448
|
|
|
25,303
|
|
|
38,212
|
|
|
|
1,148,847
|
|
|
1,002,140
|
|
|
3,227,843
|
|
|
2,678,463
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
55,637
|
|
|
42,573
|
|
|
107,442
|
|
|
81,476
|
|
Income
taxes
|
|
13,312
|
|
|
11,006
|
|
|
23,465
|
|
|
21,231
|
|
Earnings from
continuing operations
|
|
42,325
|
|
|
31,567
|
|
|
83,977
|
|
|
60,245
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
discontinued operations before income taxes (benefit)
|
|
(3,389)
|
|
|
9,325
|
|
|
5,021
|
|
|
19,687
|
|
Income taxes
(benefit)
|
|
(1,029)
|
|
|
1,626
|
|
|
2,052
|
|
|
4,059
|
|
Earnings (loss) from
discontinued operations
|
|
(2,360)
|
|
|
7,699
|
|
|
2,969
|
|
|
15,628
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
39,965
|
|
|
39,266
|
|
|
86,946
|
|
|
75,873
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share*
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.36
|
|
|
$
|
0.27
|
|
|
$
|
0.72
|
|
|
$
|
0.52
|
|
Earnings (loss) from
discontinued operations
|
|
(0.02)
|
|
|
0.07
|
|
|
0.03
|
|
|
0.14
|
|
Net
earnings
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.74
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share*
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.36
|
|
|
$
|
0.27
|
|
|
$
|
0.71
|
|
|
$
|
0.51
|
|
Earnings (loss) from
discontinued operations
|
|
(0.02)
|
|
|
0.07
|
|
|
0.03
|
|
|
0.13
|
|
Net
earnings
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.74
|
|
|
$
|
0.65
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Average basic shares
outstanding
|
|
117,111,799
|
|
|
115,886,372
|
|
|
116,722,504
|
|
|
115,574,289
|
|
Average diluted
shares outstanding
|
|
118,254,791
|
|
|
117,205,369
|
|
|
118,050,864
|
|
|
117,087,341
|
|
|
* EPS is calculated
independently for each component and may not sum to Net Earnings
EPS due to rounding
|
COMMERCIAL METALS
COMPANY CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in
thousands)
|
|
May
31, 2018
|
|
August
31, 2017
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
600,444
|
|
|
$
|
252,595
|
|
Accounts receivable
(less allowance for doubtful accounts of $4,648 and
$4,146)
|
|
678,343
|
|
|
561,411
|
|
Inventories,
net
|
|
595,231
|
|
|
462,648
|
|
Other current
assets
|
|
109,656
|
|
|
140,136
|
|
Assets of businesses
held for sale & discontinued operations
|
|
11,282
|
|
|
297,110
|
|
Total current
assets
|
|
1,994,956
|
|
|
1,713,900
|
|
Property, plant and
equipment, net
|
|
1,074,357
|
|
|
1,051,677
|
|
Goodwill
|
|
64,316
|
|
|
64,915
|
|
Other noncurrent
assets
|
|
111,864
|
|
|
144,639
|
|
Total
assets
|
|
$
|
3,245,493
|
|
|
$
|
2,975,131
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable-trade
|
|
$
|
241,584
|
|
|
$
|
226,456
|
|
Accrued expenses and
other payables
|
|
247,635
|
|
|
274,972
|
|
Current maturities of
long-term debt
|
|
19,874
|
|
|
19,182
|
|
Liabilities of
businesses held for sale & discontinued operations
|
|
2,843
|
|
|
87,828
|
|
Total current
liabilities
|
|
511,936
|
|
|
608,438
|
|
Deferred income
taxes
|
|
30,760
|
|
|
49,160
|
|
Other long-term
liabilities
|
|
110,792
|
|
|
111,023
|
|
Long-term
debt
|
|
1,139,103
|
|
|
805,580
|
|
Total
liabilities
|
|
1,792,591
|
|
|
1,574,201
|
|
Stockholders'
equity
|
|
1,452,716
|
|
|
1,400,757
|
|
Stockholders' equity
attributable to noncontrolling interests
|
|
186
|
|
|
173
|
|
Total stockholders'
equity
|
|
1,452,902
|
|
|
1,400,930
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,245,493
|
|
|
$
|
2,975,131
|
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Nine Months Ended
May 31,
|
(in
thousands)
|
|
2018
|
|
2017
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
|
86,946
|
|
|
$
|
75,873
|
|
Adjustments to
reconcile net earnings to cash flows from (used by) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
99,443
|
|
|
93,049
|
|
Stock-based
compensation
|
|
18,247
|
|
|
19,716
|
|
Asset
impairment
|
|
14,265
|
|
|
622
|
|
Deferred income taxes
& other long-term taxes
|
|
5,829
|
|
|
(2,538)
|
|
Provision for losses
on receivables, net
|
|
2,193
|
|
|
856
|
|
Net gain on disposals
of subsidiaries, assets and other
|
|
(1,578)
|
|
|
(343)
|
|
Write-down of
inventories
|
|
1,358
|
|
|
1,820
|
|
Amortization of
interest rate swaps termination gain
|
|
—
|
|
|
(5,698)
|
|
Changes in operating
assets and liabilities
|
|
(135,058)
|
|
|
(164,443)
|
|
Net cash flows from
operating activities
|
|
91,645
|
|
|
18,914
|
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(144,268)
|
|
|
(162,082)
|
|
Proceeds from the
sale of subsidiaries
|
|
75,483
|
|
|
—
|
|
Proceeds from
settlement of life insurance policies
|
|
25,000
|
|
|
—
|
|
Decrease in
restricted cash, net
|
|
23,592
|
|
|
7,492
|
|
Acquisitions
|
|
(6,980)
|
|
|
(54,425)
|
|
Proceeds from the
sale of property, plant and equipment and other
|
|
6,315
|
|
|
1,884
|
|
Net cash flows used
by investing activities
|
|
(20,858)
|
|
|
(207,131)
|
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
350,000
|
|
|
—
|
|
Cash
dividends
|
|
(42,036)
|
|
|
(41,619)
|
|
Repayments on
long-term debt
|
|
(15,382)
|
|
|
(8,775)
|
|
Stock issued under
incentive and purchase plans, net of forfeitures
|
|
(9,836)
|
|
|
(5,516)
|
|
Debt issuance
costs
|
|
(5,254)
|
|
|
—
|
|
Increase in
documentary letters of credit, net
|
|
18
|
|
|
569
|
|
Contribution from
noncontrolling interests
|
|
13
|
|
|
14
|
|
Proceeds from New
Markets Tax Credit transactions
|
|
—
|
|
|
2,141
|
|
Net cash flows from
(used by) financing activities
|
|
277,523
|
|
|
(53,186)
|
|
Effect of exchange
rate changes on cash
|
|
(461)
|
|
|
(363)
|
|
Increase (decrease)
in cash and cash equivalents
|
|
347,849
|
|
|
(241,766)
|
|
Cash and cash
equivalents at beginning of year
|
|
252,595
|
|
|
517,544
|
|
Cash and cash
equivalents at end of period
|
|
$
|
600,444
|
|
|
$
|
275,778
|
|
COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
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 from Continuing Operations is a
non-GAAP financial measure. Adjusted operating profit (loss) from
continuing operations is the sum of our earnings (loss) from
continuing operations before interest expense, income taxes
(benefit) and discounts on sales of accounts receivable. Adjusted
operating profit (loss) from continuing operations should not be
considered as an alternative to earnings (loss) from continuing
operations or net earnings (loss), as determined by GAAP. However,
we believe that adjusted operating profit (loss) from continuing
operations provides relevant and useful information, which is often
used by analysts, creditors and other interested parties as it
allows: (i) a supplemental measure of our ongoing core performance
and (ii) the assessment of period-to-period performance trends.
Management uses adjusted operating profit (loss) from continuing
operations to evaluate our financial performance. For added
flexibility, we may sell certain trade accounts receivable both in
the U.S. and internationally. We consider sales of accounts
receivable as an alternative source of liquidity to finance our
operations, and we believe that removing these costs provides a
clearer perspective of our operating performance. Adjusted
operating profit (loss) from continuing operations may be
inconsistent with similar measures presented by other
companies.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
thousands)
|
|
5/31/2018
|
|
2/28/2018
|
|
11/30/2017
|
|
8/31/2017
|
|
5/31/2017
|
|
5/31/2018
|
|
5/31/2017
|
Earnings (loss)
from continuing operations
|
|
$
|
42,325
|
|
|
$
|
9,781
|
|
|
$
|
31,871
|
|
|
$
|
(10,070)
|
|
|
$
|
31,567
|
|
|
$
|
83,977
|
|
|
$
|
60,245
|
|
Income
taxes
|
|
13,312
|
|
|
1,728
|
|
|
8,425
|
|
|
(5,955)
|
|
|
11,006
|
|
|
23,465
|
|
|
21,231
|
|
Interest
expense
|
|
11,511
|
|
|
7,181
|
|
|
6,611
|
|
|
5,939
|
|
|
12,448
|
|
|
25,303
|
|
|
38,212
|
|
Discounts on sales of
accounts receivable
|
|
261
|
|
|
196
|
|
|
258
|
|
|
206
|
|
|
230
|
|
|
715
|
|
|
639
|
|
Adjusted operating
profit from continuing operations
|
|
$
|
67,409
|
|
|
$
|
18,886
|
|
|
$
|
47,165
|
|
|
$
|
(9,880)
|
|
|
$
|
55,251
|
|
|
$
|
133,460
|
|
|
$
|
120,327
|
|
Adjusted EBITDA from Continuing Operations is a non-GAAP
financial measure. Adjusted EBITDA from continuing operations is
the sum of earnings (loss) from continuing operations before
interest expense and income taxes (benefit). It also excludes our
largest recurring non-cash charge, depreciation and amortization,
as well as long-lived asset and goodwill impairment charges, which
are also non-cash. Adjusted EBITDA from continuing operations
should not be considered as an alternative to earnings (loss) from
continuing operations or net earnings (loss), or as a better
measure of liquidity than net cash flows from operating activities,
as determined by GAAP. However, we believe that adjusted EBITDA
from continuing operations provides relevant and useful
information, which is often used by analysts, creditors and other
interested parties as it allows: (i) comparison of our earnings to
those of our competitors; (ii) a supplemental measure of our
ongoing core performance; and (iii) the assessment of
period-to-period performance trends. Additionally, adjusted EBITDA
from continuing operations is the target benchmark for our annual
and long-term cash incentive performance plans for management.
Adjusted EBITDA from continuing operations may be inconsistent with
similar measures presented by other companies.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
thousands)
|
|
5/31/2018
|
|
2/28/2018
|
|
11/30/2017
|
|
8/31/2017
|
|
5/31/2017
|
|
5/31/2018
|
|
5/31/2017
|
Earnings (loss) from
continuing operations
|
|
$
|
42,325
|
|
|
$
|
9,781
|
|
|
$
|
31,871
|
|
|
$
|
(10,070)
|
|
|
$
|
31,567
|
|
|
$
|
83,977
|
|
|
$
|
60,245
|
|
Interest
expense
|
|
11,511
|
|
|
7,181
|
|
|
6,611
|
|
|
5,939
|
|
|
12,448
|
|
|
25,303
|
|
|
38,212
|
|
Income
taxes
|
|
13,312
|
|
|
1,728
|
|
|
8,425
|
|
|
(5,955)
|
|
|
11,006
|
|
|
23,465
|
|
|
21,231
|
|
Depreciation and
amortization
|
|
32,949
|
|
|
34,050
|
|
|
31,899
|
|
|
31,880
|
|
|
32,116
|
|
|
98,898
|
|
|
92,610
|
|
Impairment
charges
|
|
935
|
|
|
12,136
|
|
|
461
|
|
|
1,182
|
|
|
70
|
|
|
13,532
|
|
|
549
|
|
Adjusted EBITDA from
continuing operations
|
|
$
|
101,032
|
|
|
$
|
64,876
|
|
|
$
|
79,267
|
|
|
$
|
22,976
|
|
|
$
|
87,207
|
|
|
$
|
245,175
|
|
|
$
|
212,847
|
|
Adjusted earnings from continuing operations is a
non-GAAP financial measure that is equal to earnings (loss) from
continuing operations before certain material acquisition and
integration related costs, mill operational start-up costs, CMC
Steel Oklahoma incentives, asset impairments, debt restructuring
and extinguishment gains and losses and severance expenses,
including the estimated income tax effects thereof.
Additionally, we adjust adjusted earnings from continuing
operations for the effects of the TCJA as well as the tax benefit
associated with an international reorganization. Adjusted
earnings from continuing operations should not be considered as an
alternative to earnings from continuing operations or any other
performance measure derived in accordance with GAAP. However, we
believe that adjusted earnings from continuing operations provides
relevant and useful information to investors as it allows: (i) a
supplemental measure of our ongoing core performance and (ii) the
assessment of period-to-period performance trends. Management uses
adjusted earnings from continuing operations to evaluate our
financial performance. Adjusted earnings from continuing
operations may be inconsistent with similar measures presented by
other companies. Adjusted earnings from continuing operations
per diluted share is defined as adjusted earnings from continuing
operations on a diluted per share basis.
A reconciliation of earnings from continuing operations to
adjusted earnings from continuing operations is provided below:
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in thousands,
except per share amounts)
|
|
5/31/2018
|
|
2/28/2018
|
|
11/30/2017
|
|
8/31/2017
|
|
5/31/2017
|
|
5/31/2018
|
|
5/31/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from
continuing operations
|
|
$
|
42,325
|
|
|
$
|
9,781
|
|
|
$
|
31,871
|
|
|
$
|
(10,070)
|
|
|
$
|
31,567
|
|
|
$
|
83,977
|
|
|
$
|
60,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration related costs
|
|
4,975
|
|
|
5,905
|
|
|
3,720
|
|
|
—
|
|
|
—
|
|
|
14,600
|
|
|
—
|
|
Mill operational
start-up costs
|
|
6,456
|
|
|
8,651
|
|
|
2,909
|
|
|
—
|
|
|
—
|
|
|
18,016
|
|
|
—
|
|
CMC Steel Oklahoma
incentives
|
|
(3,000)
|
|
|
|
|
|
|
|
|
|
|
(3,000)
|
|
|
|
Asset
impairments
|
|
—
|
|
|
12,136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,136
|
|
|
—
|
|
Loss (gain) on debt
extinguishment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,799
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Severance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,129
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total adjustments
(pre-tax)
|
|
8,431
|
|
|
26,692
|
|
|
6,629
|
|
|
25,928
|
|
|
—
|
|
|
41,752
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related tax effects
on adjustments
|
|
$
|
(1,771)
|
|
|
$
|
(6,855)
|
|
|
$
|
(2,320)
|
|
|
$
|
(9,075)
|
|
|
$
|
—
|
|
|
$
|
(10,946)
|
|
|
$
|
—
|
|
TCJA
impact
|
|
—
|
|
|
10,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,600
|
|
|
—
|
|
International
reorganization
|
|
—
|
|
|
(9,200)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,200)
|
|
|
—
|
|
Total tax
impact
|
|
$
|
(1,771)
|
|
|
$
|
(5,455)
|
|
|
$
|
(2,320)
|
|
|
$
|
(9,075)
|
|
|
$
|
—
|
|
|
$
|
(9,546)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from continuing operations
|
|
$
|
48,985
|
|
|
$
|
31,018
|
|
|
$
|
36,180
|
|
|
$
|
6,783
|
|
|
$
|
31,567
|
|
|
$
|
116,183
|
|
|
$
|
60,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from continuing operations per diluted share
|
|
$
|
0.41
|
|
|
$
|
0.26
|
|
|
$
|
0.31
|
|
|
$
|
0.06
|
|
|
$
|
0.27
|
|
|
$
|
0.98
|
|
|
$
|
0.51
|
|
View original
content:http://www.prnewswire.com/news-releases/commercial-metals-company-reports-third-quarter-2018-earnings-from-continuing-operations-of-0-36-per-share-and-adjusted-earnings-from-continuing-operations-of-0-41-per-share-300669895.html
SOURCE Commercial Metals Company