- Second quarter net earnings of $179.8
million, or $1.51 per
diluted share
- Core EBITDA of $302.8
million
- Volume and value of North
America downstream backlog near all-time highs
- Project bid volumes grew by a double-digit percentage
year-over-year, signaling strength in upcoming construction
season
- Arizona 2 project start-up
on target; expected to begin production in the spring of
2023
IRVING,
Texas, March 23, 2023 /PRNewswire/ -- Commercial
Metals Company (NYSE: CMC) today announced financial results for
its fiscal second quarter ended February 28, 2023. Net
earnings were $179.8 million, or
$1.51 per diluted share, on net sales
of $2.0 billion, compared to prior
year period net earnings of $383.3
million, or $3.12 per diluted
share, on net sales of $2.0
billion.
During the second quarter of fiscal 2023, the Company recorded a
net after-tax benefit of $14.0
million related to the settlement of an incentive resulting
from the previous capital investment at CMC's Steel Oklahoma micro
mill. This benefit was partially offset by approximately
$5.4 million in net after-tax costs
associated with ongoing commissioning efforts at Arizona 2. Excluding these items, second
quarter adjusted earnings were $171.3
million, or $1.44 per diluted
share, compared to adjusted earnings of $187.6 million, or $1.53 per diluted share, in the prior year
period. The second quarter of fiscal 2022 included a net
after-tax benefit of $195.8 million,
primarily related to a gain on the sale of real estate in
Southern California. "Adjusted
EBITDA," "core EBITDA," "adjusted earnings" and "adjusted earnings
per diluted share" are non-GAAP financial measures. Details,
including a reconciliation of each such non-GAAP financial measure
to the most directly comparable measure prepared and presented in
accordance with GAAP, can be found in the financial tables that
follow.
Barbara R. Smith, Chairman of the
Board, President and Chief Executive Officer, said, "CMC achieved
strong financial results during the second quarter while managing a
number of challenges, including weather-related shipment
disruptions in our core geographies, costs associated with a major
planned outage and steel product metal margin pressures.
These headwinds notwithstanding, our key internal indicators remain
positive, signaling a strong outlook for demand conditions in
North America during the 2023
construction season and beyond. We are entering spring with
record backlog value for this time of year and continue to
experience healthy project bid volumes, giving us confidence in the
strength of our book of business. Additionally, CMC stands to
benefit from sustainable strong demand from reshoring-oriented
industrial projects and public infrastructure work, the more
rebar-intensive nature of which represents a long-term tailwind for
our business."
Ms. Smith continued, "The start-up of our Arizona 2 mill by the end of this spring
positions CMC to capitalize on these emerging structural
trends. We are currently finalizing on-site preparation for
commissioning and are excited to ramp up this world-class asset,
the first in the world to have merchant bar production capabilities
in a continuous process. Together with our fourth micro mill
under development in Berkeley County,
West Virginia and our Tensar
growth platform, we continue to expect that our strategic
investments will meaningfully enhance CMC's through-the-cycle cash
flows and return on capital, creating substantial value for our
shareholders while also enhancing our leadership position in
sustainability metrics."
The Company's balance sheet and liquidity position remained
strong as of February 28, 2023. Cash and cash
equivalents ended the quarter at $604.0
million, while available liquidity totaled $1.5 billion. CMC repurchased 330,000
shares of common stock during the quarter, returning $17.2 million of cash to shareholders. As
of February 28, 2023, $121.8
million remained available under the current share
repurchase authorization.
On March 22, 2023, the board of directors declared a
quarterly dividend of $0.16 per share
of CMC common stock payable to stockholders of record on
April 3, 2023. The dividend to be paid on April 12, 2023,
marks the 234th consecutive quarterly payment by the
Company, and represents a 14% increase from the dividend paid in
April 2022.
Business Segments - Fiscal Second Quarter 2023 Review
Demand for CMC's finished steel products in North America remained healthy during the
quarter, though construction activity slowed in certain geographies
due to weather-related disruptions. Downstream bid volumes, a
significant indicator of the construction project pipeline,
improved from a year ago, resulting in expansion of contract
backlog volume and value levels compared to the prior year
period. Demand from industrial end markets, which are
important for merchant products, were stable on both a sequential
and year-over-year basis.
The North America segment
reported adjusted EBITDA of $299.3
million for the second quarter of fiscal 2023, in comparison
to $535.5 million in the prior year
period. Excluding a $273.3
million gain on the sale of real estate recognized during
the prior year period, the current year results represent a 14%
increase. The improvement was driven by expanded margins over
scrap cost on shipments of steel and downstream products.
Controllable costs per ton of finished steel increased compared to
the first quarter of fiscal 2023, primarily due to a significant
scheduled replacement project that occurred during the quarter, as
well as lower fixed cost leverage on seasonally slower
shipments. Per unit costs of several key consumables
continued to moderate throughout the quarter after reaching a peak
late in fiscal 2022.
Shipment volumes of finished steel, which include steel products
and downstream products, were relatively unchanged from the prior
year period. Volume growth was constrained by weather
challenges that included freezing and icy conditions in
Texas and Oklahoma and flooding in California. The
average selling price for steel products decreased by $56 per ton compared to the second quarter of
fiscal 2022, while the cost of scrap utilized declined $90 per ton, resulting in a year-over-year
increase of $34 per ton in steel
products margin over scrap. The average selling price for
downstream products increased by $249
per ton from the prior year period and $19 per ton on a sequential quarter
basis.
The Europe segment reported
adjusted EBITDA of $12.9 million for
the second quarter of fiscal 2023, down 84% compared to adjusted
EBITDA of $81.1 million for the prior
year period. The decline was driven by higher energy costs,
lower metal margins, and a modest reduction in shipment
volumes. Europe end market
demand was mixed during the quarter. Polish construction
activity continued to grow modestly on a year-over-year basis,
while industrial production across Central Europe continued to contract. CMC's
advantageous cost position and operational flexibility provided the
ability to maintain strong shipment levels. Second quarter of
fiscal 2023 volume of 436,000 tons was 20% above the average
quarterly level of the last 10 years.
Average selling price decreased by $95 per ton in the second quarter compared to the
prior year period, while the cost of scrap utilized declined
$55 per ton. The result was a
year-over-year decline in margin over scrap of $40 per ton. Average selling price and
margin over scrap also decreased on a sequential basis by
$36 per ton and $59 per ton, respectively.
Outlook
Ms. Smith said, "We remain confident in our outlook for
financial performance in fiscal 2023, and we expect to generate
sequential improvement in core EBITDA during the third
quarter. North America
finished steel product shipments are anticipated to improve from
second quarter levels due to normal seasonality, the recovery of
volumes delayed by weather disruptions, and the support of a
historically high downstream backlog. We expect current and
new industrial projects, as well as growing levels of state and
federal infrastructure spending, will support CMC's North America volumes in the quarters
ahead. In Europe, we anticipate seasonal improvement, and
expect shipment levels will remain above the long-term historical
average due to the enhanced production capabilities of our
facilities."
Ms. Smith added, "In the third quarter, we look forward to
commissioning our Arizona 2 micro
mill, representing the next phase of growth at CMC, and we also
anticipate that recent North
America long steel price increase announcements will
stabilize metal margins at historically high levels. At the
same time, the third quarter will be impacted by a scheduled
upgrade project similar in magnitude to the planned outage taken
during the second quarter."
Conference Call
CMC invites you to listen to a live broadcast of its second
quarter fiscal 2023 conference call today, Thursday, March 23,
2023, at 11:00 a.m. ET.
Barbara R. Smith, Chairman of the
Board, 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 Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture,
recycle and fabricate steel and metal products and provide related
materials and services through a network of facilities that
includes seven electric arc furnace ("EAF") mini mills, two EAF
micro mills, one rerolling mill, steel fabrication and processing
plants, construction-related product warehouses and metal recycling
facilities in the United States
and Poland. Through its
Tensar operations, CMC is a leading
global provider of innovative ground and soil stabilization
solutions selling into more than 80 national markets through two
major product lines: TensarĀ® geogrids and GeopierĀ® foundation
systems.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the federal securities laws with respect to general
economic conditions, key macro-economic drivers that impact our
business, the effects of ongoing trade actions, the effects of
continued pressure on the liquidity of our customers, potential
synergies and organic growth provided by acquisitions and strategic
investments, demand for our products, shipment volumes, metal
margins, the effect of COVID-19 and related governmental and
economic responses thereto, the ability to operate our steel mills
at full capacity, future availability and cost of supplies of raw
materials and energy for our operations, share repurchases, legal
proceedings, construction activity, international trade, the impact
of the Russian invasion of Ukraine, capital expenditures, tax credits,
our liquidity and our ability to satisfy future liquidity
requirements, estimated contractual obligations, the expected
capabilities and benefits of new facilities, the timeline for
execution of our growth plan, and our expectations or beliefs
concerning future events. The statements in this release that are
not historical statements, are forward-looking statements. These
forward-looking statements can generally be identified by phrases
such as we or our management "expects," "anticipates," "believes,"
"estimates," "future," "intends," "may," "plans to," "ought,"
"could," "will," "should," "likely," "appears," "projects,"
"forecasts," "outlook" or other similar words or phrases, as well
as by discussions of strategy, plans or intentions.
Our forward-looking statements are based on management's
expectations and beliefs as of the time this news release was
prepared. Although we believe that our expectations are reasonable,
we can give no assurance that these expectations will prove to have
been correct, and actual results may vary materially. Except as
required by law, we undertake no obligation to update, amend or
clarify any forward-looking statements to reflect changed
assumptions, the occurrence of anticipated or unanticipated events,
new information or circumstances or any other changes. Important
factors that could cause actual results to differ materially from
our expectations include those described in our filings with the
Securities and Exchange Commission, including, but not limited to,
in Part I, Item 1A, "Risk Factors" of our annual report on Form
10-K for the fiscal year ended August 31, 2022 as well as the
following: changes in economic conditions which affect demand for
our products or construction activity generally, and the impact of
such changes on the highly cyclical steel industry; rapid and
significant changes in the price of metals, potentially impairing
our inventory values due to declines in commodity prices or
reducing the profitability of our downstream contracts due to
rising commodity pricing; excess capacity in our industry,
particularly in China, and product
availability from competing steel mills and other steel suppliers
including import quantities and pricing; the impact of the Russian
invasion of Ukraine on the global
economy, inflation, energy supplies and raw materials, which is
uncertain, but may prove to negatively impact our business and
operations; 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 epidemics, including
the COVID-19 pandemic, on the economy, demand for our products,
global supply chain and on our operations; compliance with and
changes in existing and future laws, regulations and other legal
requirements and judicial decisions that govern our business,
including increased environmental regulations associated with
climate change and greenhouse gas emissions; involvement in various
environmental matters that may result in fines, penalties or
judgments; evolving remediation technology, changing regulations,
possible third-party contributions, the inherent uncertainties of
the estimation process and other factors that may impact amounts
accrued for environmental liabilities; potential limitations in our
or our customers' abilities to access credit and non-compliance
with their contractual obligations, including payment obligations;
activity in repurchasing shares of our common stock under our share
repurchase program; financial and non-financial covenants and
restrictions on the operation of our business contained in
agreements governing our debt; our ability to successfully
identify, consummate and integrate acquisitions and realize any or
all of the anticipated synergies or other benefits of acquisitions;
the effects that acquisitions may have on our financial leverage;
risks associated with acquisitions generally, such as the inability
to obtain, or delays in obtaining, required approvals under
applicable antitrust legislation and other regulatory and third
party consents and approvals; lower than expected future
levels of revenues and higher than expected future costs; failure
or inability to implement growth strategies in a timely manner; the
impact of goodwill or other indefinite lived intangible asset
impairment charges; the impact of long-lived asset impairment
charges; currency fluctuations; global factors, such as trade
measures, military conflicts and political uncertainties, including
changes to current trade regulations, such as Section 232 trade
tariffs and quotas, tax legislation and other regulations which
might adversely impact our business; availability and pricing of
electricity, electrodes and natural gas for mill operations; our
ability to hire and retain key executives and other employees;
competition from other materials or from competitors that have a
lower cost structure or access to greater financial resources;
information technology interruptions and breaches in security; our
ability to make necessary capital expenditures; availability and
pricing of raw materials and other items over which we exert little
influence, including scrap metal, energy and insurance; unexpected
equipment failures; losses or limited potential gains due to
hedging transactions; litigation claims and settlements, court
decisions, regulatory rulings and legal compliance risks; risk of
injury or death to employees, customers or other visitors to our
operations; and civil unrest, protests and riots.
COMMERCIAL METALS
COMPANY
FINANCIAL &
OPERATING STATISTICS (UNAUDITED)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in thousands,
except per ton amounts)
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
2/28/2022
|
|
2/28/2023
|
|
2/28/2022
|
North
America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,640,933
|
|
$
1,816,899
|
|
$
1,997,636
|
|
$
2,033,150
|
|
$
1,614,224
|
|
$
3,457,832
|
|
$
3,267,846
|
Adjusted
EBITDA
|
|
299,311
|
|
377,956
|
|
370,516
|
|
379,355
|
|
535,463
|
|
677,267
|
|
803,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
321
|
|
316
|
|
359
|
|
353
|
|
329
|
|
637
|
|
663
|
Rebar
|
|
425
|
|
461
|
|
451
|
|
505
|
|
407
|
|
886
|
|
849
|
Merchant and
other
|
|
236
|
|
243
|
|
249
|
|
274
|
|
245
|
|
479
|
|
502
|
Steel
products
|
|
661
|
|
704
|
|
700
|
|
779
|
|
652
|
|
1,365
|
|
1,351
|
Downstream
products
|
|
311
|
|
382
|
|
432
|
|
399
|
|
327
|
|
693
|
|
727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw
materials
|
|
$
868
|
|
$
824
|
|
$
950
|
|
$
1,207
|
|
$
1,103
|
|
$
846
|
|
$
1,068
|
Steel
products
|
|
985
|
|
1,020
|
|
1,104
|
|
1,110
|
|
1,041
|
|
1,003
|
|
1,007
|
Downstream
products
|
|
1,418
|
|
1,399
|
|
1,348
|
|
1,244
|
|
1,169
|
|
1,408
|
|
1,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of raw materials
per ton
|
|
$
639
|
|
$
598
|
|
$
717
|
|
$
908
|
|
$
834
|
|
$
618
|
|
$
800
|
Cost of ferrous scrap
utilized per ton
|
|
$
346
|
|
$
325
|
|
$
387
|
|
$
472
|
|
$
436
|
|
$
335
|
|
$
432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
639
|
|
$
695
|
|
$
717
|
|
$
638
|
|
$
605
|
|
$
668
|
|
$
575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
355,633
|
|
$
406,513
|
|
$
412,264
|
|
$
484,564
|
|
$
395,758
|
|
$
762,146
|
|
$
724,814
|
Adjusted
EBITDA
|
|
12,949
|
|
64,505
|
|
64,096
|
|
120,974
|
|
81,149
|
|
77,454
|
|
160,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar
|
|
183
|
|
204
|
|
177
|
|
170
|
|
172
|
|
387
|
|
275
|
Merchant and
other
|
|
253
|
|
269
|
|
251
|
|
306
|
|
278
|
|
522
|
|
540
|
Steel
products
|
|
436
|
|
473
|
|
428
|
|
476
|
|
450
|
|
909
|
|
815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price
per ton
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
products
|
|
$
756
|
|
$
792
|
|
$
888
|
|
$
967
|
|
$
851
|
|
$
775
|
|
$
859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of ferrous scrap
utilized per ton
|
|
$
389
|
|
$
366
|
|
$
435
|
|
$
530
|
|
$
444
|
|
$
377
|
|
$
439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal
margin per ton
|
|
$
367
|
|
$
426
|
|
$
453
|
|
$
437
|
|
$
407
|
|
$
398
|
|
$
420
|
COMMERCIAL METALS
COMPANY
BUSINESS SEGMENTS
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
2/28/2022
|
|
2/28/2023
|
|
2/28/2022
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$ 1,640,933
|
|
$ 1,816,899
|
|
$ 1,997,636
|
|
$ 2,033,150
|
|
$ 1,614,224
|
|
$ 3,457,832
|
|
$ 3,267,846
|
Europe
|
|
355,633
|
|
406,513
|
|
412,264
|
|
484,564
|
|
395,758
|
|
762,146
|
|
724,814
|
Corporate and
Other
|
|
21,437
|
|
3,901
|
|
(2,835)
|
|
(1,987)
|
|
(1,094)
|
|
25,338
|
|
(1,971)
|
Total net
sales
|
|
$ 2,018,003
|
|
$ 2,227,313
|
|
$ 2,407,065
|
|
$ 2,515,727
|
|
$ 2,008,888
|
|
$ 4,245,316
|
|
$ 3,990,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
|
$
299,311
|
|
$
377,956
|
|
$
370,516
|
|
$
379,355
|
|
$
535,463
|
|
$
677,267
|
|
$
803,987
|
Europe
|
|
12,949
|
|
64,505
|
|
64,096
|
|
120,974
|
|
81,149
|
|
77,454
|
|
160,981
|
Corporate and
Other
|
|
(15,573)
|
|
(39,725)
|
|
(32,227)
|
|
(35,049)
|
|
(52,493)
|
|
(55,298)
|
|
(86,827)
|
Total adjusted
EBITDA
|
|
$
296,687
|
|
$
402,736
|
|
$
402,385
|
|
$
465,280
|
|
$
564,119
|
|
$
699,423
|
|
$
878,141
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
|
|
Three Months Ended
February 28,
|
|
Six Months Ended
February 28,
|
(in thousands,
except share and per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$ 2,018,003
|
|
$ 2,008,888
|
|
$
4,245,316
|
|
$
3,990,689
|
Costs and operating
expenses (income):
|
|
|
|
|
|
|
|
Cost of goods
sold
|
1,621,763
|
|
1,614,965
|
|
3,341,177
|
|
3,201,375
|
Selling, general and
administrative expenses
|
150,427
|
|
127,985
|
|
306,550
|
|
251,563
|
Interest
expense
|
9,945
|
|
12,011
|
|
22,990
|
|
23,046
|
Asset
impairments
|
36
|
|
1,228
|
|
45
|
|
1,228
|
Loss on debt
extinguishment
|
27
|
|
16,052
|
|
178
|
|
16,052
|
Loss (gain) on sale of
assets
|
315
|
|
(273,099)
|
|
387
|
|
(274,082)
|
|
1,782,513
|
|
1,499,142
|
|
3,671,327
|
|
3,219,182
|
Earnings before income
taxes
|
235,490
|
|
509,746
|
|
573,989
|
|
771,507
|
Income taxes
|
55,641
|
|
126,432
|
|
132,366
|
|
155,304
|
Net earnings
|
$
179,849
|
|
$
383,314
|
|
$
441,623
|
|
$
616,203
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.53
|
|
$
3.16
|
|
$
3.77
|
|
$
5.08
|
Diluted
|
$
1.51
|
|
$
3.12
|
|
$
3.71
|
|
$
5.02
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
$
0.16
|
|
$
0.14
|
|
$
0.32
|
|
$
0.28
|
Average basic shares
outstanding
|
117,224,517
|
|
121,458,196
|
|
117,249,266
|
|
121,293,030
|
Average diluted shares
outstanding
|
118,723,259
|
|
122,852,410
|
|
118,985,098
|
|
122,747,981
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in thousands,
except share and per share data)
|
|
February 28,
2023
|
|
August 31,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
603,966
|
|
$
672,596
|
Accounts receivable
(less allowance for doubtful accounts of $4,928 and
$4,990)
|
|
1,263,547
|
|
1,358,907
|
Inventories,
net
|
|
1,144,268
|
|
1,169,696
|
Prepaid and other
current assets
|
|
266,365
|
|
240,269
|
Total current
assets
|
|
3,278,146
|
|
3,441,468
|
Property, plant and
equipment, net
|
|
2,159,730
|
|
1,910,871
|
Intangible assets,
net
|
|
248,723
|
|
257,409
|
Goodwill
|
|
278,711
|
|
249,009
|
Other noncurrent
assets
|
|
519,541
|
|
378,270
|
Total assets
|
|
$
6,484,851
|
|
$
6,237,027
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
422,814
|
|
$
428,055
|
Accrued expenses and
other payables
|
|
378,572
|
|
540,136
|
Current maturities of
long-term debt and short-term borrowings
|
|
264,762
|
|
388,796
|
Total current
liabilities
|
|
1,066,148
|
|
1,356,987
|
Deferred income
taxes
|
|
303,367
|
|
250,302
|
Other noncurrent
liabilities
|
|
232,415
|
|
230,060
|
Long-term
debt
|
|
1,099,728
|
|
1,113,249
|
Total
liabilities
|
|
2,701,658
|
|
2,950,598
|
Stockholders'
equity:
|
|
|
|
|
Common stock, par value
$0.01 per share; authorized 200,000,000 shares; issued 129,060,664
shares; outstanding 117,205,307 and 117,496,053 shares
|
|
1,290
|
|
1,290
|
Additional paid-in
capital
|
|
374,440
|
|
382,767
|
Accumulated other
comprehensive income (loss)
|
|
24,496
|
|
(114,451)
|
Retained
earnings
|
|
3,716,537
|
|
3,312,438
|
Less treasury stock,
11,855,357 and 11,564,611 shares at cost
|
|
(333,802)
|
|
(295,847)
|
Stockholders'
equity
|
|
3,782,961
|
|
3,286,197
|
Stockholders' equity
attributable to non-controlling interests
|
|
232
|
|
232
|
Total stockholders'
equity
|
|
3,783,193
|
|
3,286,429
|
Total liabilities and
stockholders' equity
|
|
$
6,484,851
|
|
$
6,237,027
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Six Months Ended
February 28,
|
(in
thousands)
|
|
2023
|
|
2022
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
441,623
|
|
$
616,203
|
Adjustments to
reconcile net earnings to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
102,399
|
|
82,360
|
Stock-based
compensation
|
|
33,624
|
|
25,870
|
Deferred income taxes
and other long-term taxes
|
|
26,930
|
|
34,980
|
Write-down of
inventory
|
|
5,532
|
|
123
|
Net loss (gain) on
disposals of assets
|
|
387
|
|
(274,082)
|
Loss on debt
extinguishment
|
|
178
|
|
16,052
|
Asset
impairments
|
|
45
|
|
1,228
|
Other
|
|
4,006
|
|
712
|
Settlement of New
Markets Tax Credit transaction
|
|
(17,659)
|
|
ā
|
Changes in operating
assets and liabilities, net of acquisitions
|
|
(38,158)
|
|
(449,078)
|
Net cash flows from
operating activities
|
|
558,907
|
|
54,368
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(289,251)
|
|
(191,562)
|
Acquisitions, net of
cash acquired
|
|
(65,153)
|
|
ā
|
Proceeds from
insurance
|
|
2,456
|
|
3,081
|
Proceeds from the sale
of property, plant and equipment and other
|
|
531
|
|
309,563
|
Other
|
|
(1,185)
|
|
ā
|
Net cash flows from
(used by) investing activities
|
|
(352,602)
|
|
121,082
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Proceeds from issuance
of long-term debt, net
|
|
ā
|
|
740,403
|
Repayments of
long-term debt
|
|
(160,263)
|
|
(313,174)
|
Debt issuance
costs
|
|
(1,800)
|
|
(2,977)
|
Debt extinguishment
costs
|
|
(96)
|
|
(13,642)
|
Proceeds from accounts
receivable facilities
|
|
74,963
|
|
190,730
|
Repayments under
accounts receivable facilities
|
|
(77,843)
|
|
(215,196)
|
Treasury stock
acquired
|
|
(66,323)
|
|
(17,010)
|
Tax withholdings
related to share settlements, net of purchase plans
|
|
(14,789)
|
|
(10,719)
|
Dividends
|
|
(37,524)
|
|
(34,011)
|
Net cash flows from
(used by) financing activities
|
|
(283,675)
|
|
324,404
|
Effect of exchange rate
changes on cash
|
|
6,545
|
|
(1,283)
|
Increase
(decrease) in cash,
restricted cash, and cash equivalents
|
|
(70,825)
|
|
498,571
|
Cash, restricted cash
and cash equivalents at beginning of period
|
|
679,243
|
|
501,129
|
Cash, restricted cash
and cash equivalents at end of period
|
|
$
608,418
|
|
$
999,700
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
114,585
|
|
$
133,194
|
Cash paid for
interest
|
|
35,036
|
|
24,916
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
603,966
|
|
$
846,587
|
Restricted
cash
|
|
4,452
|
|
153,113
|
Total cash, restricted
cash and cash equivalents
|
|
$
608,418
|
|
$
999,700
|
COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
This press release contains financial measures not derived in
accordance with U.S. generally accepted accounting principles
("GAAP"). Reconciliations to the most comparable GAAP measure are
provided below.
Adjusted EBITDA, core EBITDA and adjusted earnings are non-GAAP
financial measures. Adjusted earnings per diluted share is defined
as adjusted earnings on a diluted per share basis.
Non-GAAP financial measures should be viewed in addition to, and
not as alternatives for, the most directly comparable measures
derived in accordance with GAAP and may not be comparable to
similar measures presented by other companies. However, we believe
that the non-GAAP financial measures provide relevant and useful
information to management, investors, analysts, creditors and other
interested parties in our industry as they allow: (i) comparison of
our earnings to those of our competitors; (ii) a supplemental
measure of our underlying business operational performance; and
(iii) the assessment of period-to-period performance trends.
Management uses non-GAAP financial measures to evaluate financial
performance and set target benchmarks for annual and long-term cash
incentive performance plans.
A reconciliation of net earnings to adjusted EBITDA and core
EBITDA is provided below:
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
2/28/2022
|
|
2/28/2023
|
|
2/28/2022
|
Net earnings
|
$
179,849
|
|
$
261,774
|
|
$
288,630
|
|
$
312,429
|
|
$
383,314
|
|
$
441,623
|
|
$
616,203
|
Interest
expense
|
9,945
|
|
13,045
|
|
14,230
|
|
13,433
|
|
12,011
|
|
22,990
|
|
23,046
|
Income
taxes
|
55,641
|
|
76,725
|
|
49,991
|
|
92,590
|
|
126,432
|
|
132,366
|
|
155,304
|
Depreciation and
amortization
|
51,216
|
|
51,183
|
|
49,081
|
|
43,583
|
|
41,134
|
|
102,399
|
|
82,360
|
Asset
impairments
|
36
|
|
9
|
|
453
|
|
3,245
|
|
1,228
|
|
45
|
|
1,228
|
Adjusted
EBITDA
|
296,687
|
|
402,736
|
|
402,385
|
|
465,280
|
|
564,119
|
|
699,423
|
|
878,141
|
Non-cash equity
compensation
|
16,949
|
|
16,675
|
|
9,122
|
|
11,986
|
|
16,251
|
|
33,624
|
|
25,870
|
Mill operational
start-up costs(1)
|
6,811
|
|
5,574
|
|
ā
|
|
ā
|
|
ā
|
|
12,385
|
|
ā
|
Settlement of New
Markets Tax Credit transaction
|
(17,659)
|
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
(17,659)
|
|
ā
|
Acquisition and
integration related costs and other
|
ā
|
|
ā
|
|
1,008
|
|
4,478
|
|
ā
|
|
ā
|
|
3,165
|
Purchase accounting
effect on inventory
|
ā
|
|
ā
|
|
6,506
|
|
2,169
|
|
ā
|
|
ā
|
|
ā
|
Gain on sale of
assets
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
(273,315)
|
|
ā
|
|
(273,315)
|
Loss on debt
extinguishment
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
16,052
|
|
ā
|
|
16,052
|
Core EBITDA
|
$
302,788
|
|
$
424,985
|
|
$
419,021
|
|
$
483,913
|
|
$
323,107
|
|
$
727,773
|
|
$
649,913
|
|
|
|
|
|
(1)
|
Net of depreciation and
non-cash equity compensation.
|
A reconciliation of net earnings to adjusted earnings is
provided below:
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
thousands)
|
2/28/2023
|
|
11/30/2022
|
|
8/31/2022
|
|
5/31/2022
|
|
2/28/2022
|
|
2/28/2023
|
|
2/28/2022
|
Net earnings
|
$ 179,849
|
|
$ 261,774
|
|
$ 288,630
|
|
$ 312,429
|
|
$
383,314
|
|
$
441,623
|
|
$
616,203
|
Asset
impairments
|
36
|
|
9
|
|
453
|
|
3,245
|
|
1,228
|
|
45
|
|
1,228
|
Mill operational
start-up costs
|
6,825
|
|
5,584
|
|
ā
|
|
ā
|
|
ā
|
|
12,409
|
|
ā
|
Settlement of New
Markets Tax Credit transaction
|
(17,659)
|
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
(17,659)
|
|
ā
|
Acquisition and
integration related costs and other
|
ā
|
|
ā
|
|
1,008
|
|
4,478
|
|
ā
|
|
ā
|
|
3,165
|
Purchase accounting
effect on inventory
|
ā
|
|
ā
|
|
6,506
|
|
2,169
|
|
ā
|
|
ā
|
|
ā
|
Gain on sale of
assets
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
(273,315)
|
|
ā
|
|
(273,315)
|
Loss on debt
extinguishment
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
16,052
|
|
ā
|
|
16,052
|
Total adjustments
(pre-tax)
|
$ (10,798)
|
|
$ 5,593
|
|
$ 7,967
|
|
$ 9,892
|
|
$
(256,035)
|
|
$ (5,205)
|
|
$ (252,870)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
restructuring
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
ā
|
|
(36,237)
|
Related tax effects on
adjustments
|
2,268
|
|
(1,175)
|
|
(1,673)
|
|
(2,077)
|
|
60,274
|
|
1,093
|
|
59,609
|
Total tax
items
|
2,268
|
|
(1,175)
|
|
(1,673)
|
|
(2,077)
|
|
60,274
|
|
1,093
|
|
23,372
|
Adjusted
earnings
|
$ 171,319
|
|
$ 266,192
|
|
$ 294,924
|
|
$ 320,244
|
|
$
187,553
|
|
$
437,511
|
|
$
386,705
|
Net earnings per
diluted share
|
$ 1.51
|
|
$
2.20
|
|
$
2.40
|
|
$
2.54
|
|
$
3.12
|
|
$
3.71
|
|
$
5.02
|
Adjusted earnings per
diluted share
|
$ 1.44
|
|
$
2.24
|
|
$
2.45
|
|
$
2.61
|
|
$
1.53
|
|
$
3.68
|
|
$
3.15
|
View original
content:https://www.prnewswire.com/news-releases/commercial-metals-company-reports-second-quarter-fiscal-2023-results-301779511.html
SOURCE Commercial Metals Company