IRVING, Texas, March 27,
2014 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) today
announced financial results for its second quarter ended
February 28, 2014. Net earnings attributable to CMC for the
second quarter were $11.1 million, or
$0.09 per diluted share, on net sales
of $1.6 billion. Results for the
three months ended February 28, 2014
included an after-tax charge of approximately $3 million ($0.03
per diluted share) incurred in connection with the Company's final
settlement of the Standard Iron Works v. Arcelor Mittal et
al. lawsuit. This compares to net earnings attributable to CMC
of $4.6 million, or $0.04 per diluted share, on net sales of
$1.7 billion for the three months
ended February 28, 2013.
Results for this year's second quarter included after-tax LIFO
expense of $12.3 million
($0.10 per diluted share), compared
with after-tax LIFO income from continuing operations of
$0.3 million ($0.00 per diluted share) for the second quarter
of fiscal 2013, an unfavorable change of $12.6 million ($0.10 per diluted share). Adjusted operating
profit was $35.2 million for the
second quarter of fiscal 2014, compared with adjusted operating
profit of $26.7 million for the prior
year's second quarter. Adjusted EBITDA was $67.9 million for the second quarter of fiscal
2014, compared with adjusted EBITDA of $60.1
million for the prior year's second quarter.
The Company's financial position at February 28, 2014
remained strong with cash and cash equivalents of $431.8 million and approximately $1 billion in total liquidity, compared with cash
and cash equivalents of $378.8
million and total liquidity of $1.1
billion at August 31,
2013.
Joe Alvarado, Chairman of the
Board, President, and CEO, commented, "As expected, results for the
second quarter declined due to the impact of normal seasonality,
inclement weather conditions particularly in North America and holiday slowdowns. However,
we are encouraged by the second quarter results of our Polish
operations, which were driven by economic improvements in
Poland and surrounding markets. In
addition, backlogs in our Americas division as of February 28,
2014 were at record highs."
On March 26, 2014, the board of
directors of CMC declared a quarterly dividend of $0.12 per share for shareholders of record on
April 9, 2014. The dividend
will be paid on April 23, 2014.
Business Segments
Our Americas Recycling segment
recorded adjusted operating loss of $0.9
million for the second quarter of fiscal 2014, compared with
adjusted operating profit of $2.2
million for the second quarter of fiscal 2013. The decline
in this segment's performance is attributed to a 5% decline in
ferrous metal margins as a result of a 7% increase in ferrous
material costs, which outpaced an increase in ferrous selling
prices of 4% when compared to the second quarter of fiscal 2013.
The decline in profitability was offset by a $2.0 million favorable change in pre-tax LIFO,
from pre-tax LIFO expense of $1.0
million in the second quarter of fiscal 2013 to pre-tax LIFO
income of $1.0 million in the second
quarter of fiscal 2014.
Our Americas Mills segment recorded adjusted operating profit of
$44.1 million for this year's second
quarter, compared with adjusted operating profit of $47.7 million for the prior year's second
quarter. While shipments for each of this segment's products
increased during the second quarter of fiscal 2014 when compared to
the second quarter of fiscal 2013, an $18 per short ton increase in the average cost of
ferrous scrap consumed, as well as a $7 per short ton decrease in average selling
price of this segment's products, resulted in an 8%, or
$25 per short ton, metal margin
compression, when compared to the second quarter of fiscal 2013.
Additionally, pre-tax LIFO expense increased $8.3 million from the second quarter of fiscal
2013 to the second quarter of fiscal 2014. This increase in pre-tax
LIFO expense, coupled with metal margin compression, resulted in a
$3.6 million, or 8%, decline in this
segment's adjusted operating profit in the second quarter of fiscal
2014 when compared to the second quarter of fiscal 2013.
Our Americas Fabrication segment recorded adjusted operating
loss of $5.3 million for this year's
second quarter, compared with adjusted operating loss of
$3.8 million for the second quarter
of fiscal 2013. The decline in profitability was primarily due to a
$5.0 million unfavorable change in
pre-tax LIFO, from pre-tax LIFO income of $0.5 million in the second quarter of fiscal 2013
to pre-tax LIFO expense of $4.5
million in the second quarter of fiscal 2014. The
unfavorable charge to pre-tax LIFO was partially offset by a
$45 per short ton increase in metal
margin as a result of a 6% decrease in material cost, when compared
to the second quarter of fiscal 2013.
Our International Mill segment recorded adjusted operating
profit of $8.3 million for this
year's second quarter, compared with adjusted operating loss of
$4.2 million for the prior year's
second quarter. While tons shipped were steady for the current
quarter when compared to the same quarter in the prior year, sales
prices increased by $23 per short ton
and the cost of ferrous scrap consumed decreased by $4 per short ton, resulting in a 12% increase in
metal margin, which contributed to the improved operating results.
Volumes for this segment's merchant products increased by
approximately 34 thousand short tons when compared to the prior
year's second quarter, with February representing a record month
for merchant shipments.
Our International Marketing and Distribution segment recorded
adjusted operating profit of $2.5
million for this year's second quarter, compared with
adjusted operating profit of $3.9
million for the prior year's second quarter. The decline in
adjusted operating profit compared to the second quarter of fiscal
2013 was primarily attributed to an $8.1
million unfavorable change in pre-tax LIFO associated with
our U.S.-based trading divisions, from pre-tax LIFO income of
$4.3 million in the second quarter of
fiscal 2013 to pre-tax LIFO expense of $3.8
million in the second quarter of fiscal 2014. Additionally,
our U.S.-based trading divisions experienced an increase in metal
margins, which partially offset the unfavorable change in pre-tax
LIFO. All non-U.S. divisions within this segment recorded
improvements to adjusted operating profit for the second quarter of
fiscal 2014 when compared to the same quarter in the prior year.
Our Australian operations reported a modest improvement for the
second quarter of fiscal 2014 compared to the same quarter in the
prior year. The Australian market remains depressed with ongoing
aggressive competition for volumes; however, cost improvements have
resulted in improved operating results for this division.
Year to Date Results
Net earnings attributable to CMC
for the six months ended February 28, 2014 were $57.1 million ($0.48 per diluted share) on net sales of
$3.3 billion, compared with net
earnings attributable to CMC of $54.3
million ($0.46 per diluted
share) on net sales of $3.4 billion
for the six months ended February 28, 2013. Results for the
six months ended February 28, 2014
included an after-tax gain of $15.5
million ($0.13 per diluted
share) associated with the sale of the Company's wholly owned
copper tube manufacturing operation, Howell Metal Company
("Howell"). Results for the six months ended February 28, 2013 included an after-tax gain of
$17.0 million ($0.14 per diluted share) associated with the sale
of the Company's 11% ownership interest in Trinecke Zelezarny,
a.s., a Czech Republic joint-stock
company. The Company recorded after-tax LIFO expense of
$15.1 million ($0.13 per diluted share) for the six months ended
February 28, 2014, compared with after-tax LIFO income of
$15.4 million ($0.13 per diluted share) for the six months ended
February 28, 2013. For the six months ended February 28,
2014, adjusted operating profit was $125.2
million, compared with $117.3
million for the six months ended February 28, 2013.
Adjusted EBITDA was $192.2 million
for the six months ended February 28, 2014, compared with
$186.2 million for the six months
ended February 28, 2013.
Outlook
Alvarado concluded, "Our third quarter
typically brings warmer weather and therefore seasonal improvements
in the construction markets, which we expect will spur activity in
the industry. Overall, the U.S. construction markets continued to
show improvement during the second quarter of 2014, but at a slower
pace than we would like to see. While the American Institute of
Architects reported the Architecture Billings Index (ABI) below 50
in November and December of 2013, the ABI index rebounded in
January 2014 to 50.4 and to 50.7 in
February 2014, which we believe
points to improvement in the domestic construction markets. This
growth may be offset by a continued influx of Turkish rebar
imports, pending the upcoming countervailing and anti-dumping
decisions by the U.S. Commerce Department in April. In the upcoming
months, our Polish operations plan to commission a new modern
electric arc furnace, and we anticipate that this upgrade, over
time, will translate into meaningful operating cost improvements in
our International Mill segment. Despite improvements in the
Eurozone during the second quarter of fiscal 2014, the recent
turmoil in Ukraine could have an
adverse impact on our European operations. Although growth in
China has slowed and import
pricing has continued to challenge our operations, we are hopeful
that global economic improvements will positively impact our
businesses."
Conference Call
CMC invites you to listen to a live
broadcast of its second quarter of fiscal 2014 conference call
today, Thursday, March 27, 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 our website on the next business day. Financial and
statistical information presented in the webcast will be 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 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 the Company's expectations
relating to the Company's future results, economic conditions and
the Company'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, the Company undertakes no
obligation to update, amend or clarify any forward-looking
statements to reflect events, new information or otherwise.
Actual results may differ materially from those projected as a
result of certain risks and uncertainties, including, but not
limited to, the following: absence of global economic recovery or
possible recession relapse and the pace of overall global economic
activity; construction activity or lack thereof; decisions by
governments affecting the level of steel imports, including tariffs
and duties; difficulties or delays in the execution of construction
contracts resulting in cost overruns or contract disputes; metals
pricing over which the Company exerts little influence; increased
capacity and product availability from competing steel minimills
and other steel suppliers, including import quantities and pricing;
execution of cost reduction strategies; industry
consolidation or changes in production capacity or
utilization; currency fluctuations; availability and
pricing of raw materials, including scrap metal, energy, insurance
and supply prices; passage of new, or interpretation of existing,
environmental laws and regulations; and those factors listed
under Item 1A "Risk Factors" included in our Annual Report on Form
10-K for the fiscal year ended August 31, 2013.
COMMERCIAL METALS
COMPANY
OPERATING
STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)
|
|
|
|
Three Months Ended
February 28,
|
|
Six Months Ended
February 28,
|
(short tons in
thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Americas Recycling
tons shipped
|
|
573
|
|
|
574
|
|
|
1,132
|
|
|
1,136
|
|
|
|
|
|
|
|
|
|
|
Americas Steel Mills
rebar shipments
|
|
340
|
|
|
328
|
|
|
731
|
|
|
697
|
|
Americas Steel Mills
structural and other shipments
|
|
291
|
|
|
274
|
|
|
576
|
|
|
571
|
|
Total Americas
Steel Mills tons shipped
|
|
631
|
|
|
602
|
|
|
1,307
|
|
|
1,268
|
|
|
|
|
|
|
|
|
|
|
Americas Steel Mills
average FOB selling price (total sales)
|
|
$
|
675
|
|
|
$
|
682
|
|
|
$
|
666
|
|
|
$
|
675
|
|
Americas Steel Mills
average cost ferrous scrap consumed
|
|
$
|
368
|
|
|
$
|
350
|
|
|
$
|
351
|
|
|
$
|
345
|
|
Americas Steel
Mills metal margin
|
|
$
|
307
|
|
|
$
|
332
|
|
|
$
|
315
|
|
|
$
|
330
|
|
Americas Steel Mills
average ferrous scrap purchase price
|
|
$
|
322
|
|
|
$
|
307
|
|
|
$
|
310
|
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
|
International Mill
shipments
|
|
271
|
|
|
277
|
|
|
631
|
|
|
622
|
|
|
|
|
|
|
|
|
|
|
International Mill
average FOB selling price (total sales)
|
|
$
|
628
|
|
|
$
|
605
|
|
|
$
|
614
|
|
|
$
|
604
|
|
International Mill
average cost ferrous scrap consumed
|
|
$
|
375
|
|
|
$
|
379
|
|
|
$
|
363
|
|
|
$
|
380
|
|
International Mill
metal margin
|
|
$
|
253
|
|
|
$
|
226
|
|
|
$
|
251
|
|
|
$
|
224
|
|
International Mill
average ferrous scrap purchase price
|
|
$
|
315
|
|
|
$
|
303
|
|
|
$
|
308
|
|
|
$
|
307
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
rebar shipments
|
|
203
|
|
|
204
|
|
|
437
|
|
|
429
|
|
Americas Fabrication
structural and post shipments
|
|
37
|
|
|
37
|
|
|
70
|
|
|
72
|
|
Total Americas
Fabrication tons shipped
|
|
240
|
|
|
241
|
|
|
507
|
|
|
501
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
average selling price (excluding stock and buyout sales)
|
|
$
|
942
|
|
|
$
|
950
|
|
|
$
|
928
|
|
|
$
|
942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
Three Months Ended
February 28,
|
|
Six Months Ended
February 28,
|
Net
sales
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Americas
Recycling
|
|
$
|
342,267
|
|
|
$
|
351,374
|
|
|
$
|
680,470
|
|
|
$
|
703,335
|
|
Americas
Mills
|
|
456,849
|
|
|
435,577
|
|
|
938,000
|
|
|
892,315
|
|
Americas
Fabrication
|
|
325,890
|
|
|
317,966
|
|
|
684,108
|
|
|
674,558
|
|
International
Mill
|
|
181,362
|
|
|
179,765
|
|
|
410,512
|
|
|
401,832
|
|
International
Marketing and Distribution
|
|
571,808
|
|
|
649,936
|
|
|
1,082,965
|
|
|
1,258,524
|
|
Corporate
|
|
5,166
|
|
|
3,661
|
|
|
11,351
|
|
|
6,460
|
|
Eliminations
|
|
(234,244)
|
|
|
(249,622)
|
|
|
(475,417)
|
|
|
(498,852)
|
|
Total net
sales
|
|
$
|
1,649,098
|
|
|
$
|
1,688,657
|
|
|
$
|
3,331,989
|
|
|
$
|
3,438,172
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit (loss)
|
|
|
|
|
|
|
|
|
Americas
Recycling
|
|
$
|
(863)
|
|
|
$
|
2,243
|
|
|
$
|
(24)
|
|
|
$
|
6,737
|
|
Americas
Mills
|
|
44,062
|
|
|
47,685
|
|
|
109,876
|
|
|
99,346
|
|
Americas
Fabrication
|
|
(5,330)
|
|
|
(3,812)
|
|
|
(3,113)
|
|
|
6,380
|
|
International
Mill
|
|
8,331
|
|
|
(4,153)
|
|
|
23,600
|
|
|
(3,277)
|
|
International
Marketing and Distribution
|
|
2,493
|
|
|
3,948
|
|
|
2,996
|
|
|
44,109
|
|
Corporate
|
|
(15,064)
|
|
|
(19,194)
|
|
|
(33,113)
|
|
|
(36,564)
|
|
Eliminations
|
|
1,422
|
|
|
(1,083)
|
|
|
2,018
|
|
|
(1,744)
|
|
Adjusted operating
profit from continuing operations
|
|
35,051
|
|
|
25,634
|
|
|
102,240
|
|
|
114,987
|
|
Adjusted operating
profit from discontinued operations
|
|
101
|
|
|
1,037
|
|
|
22,946
|
|
|
2,287
|
|
Adjusted operating
profit
|
|
$
|
35,152
|
|
|
$
|
26,671
|
|
|
$
|
125,186
|
|
|
$
|
117,274
|
|
|
|
|
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
Three Months Ended
February 28,
|
|
Six Months Ended
February 28,
|
(in thousands,
except share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net sales
|
|
$
|
1,649,098
|
|
|
$
|
1,688,657
|
|
|
$
|
3,331,989
|
|
|
$
|
3,438,172
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
1,503,908
|
|
|
1,549,291
|
|
|
3,005,706
|
|
|
3,112,141
|
|
Selling, general and
administrative expenses
|
|
111,086
|
|
|
114,635
|
|
|
225,549
|
|
|
239,244
|
|
Interest
expense
|
|
19,179
|
|
|
16,490
|
|
|
38,757
|
|
|
33,514
|
|
Gain on sale of cost
method investment
|
|
â
|
|
|
â
|
|
|
â
|
|
|
(26,088)
|
|
|
|
1,634,173
|
|
|
1,680,416
|
|
|
3,270,012
|
|
|
3,358,811
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
14,925
|
|
|
8,241
|
|
|
61,977
|
|
|
79,361
|
|
Income
taxes
|
|
3,866
|
|
|
4,308
|
|
|
18,957
|
|
|
26,497
|
|
Earnings from
continuing operations
|
|
11,059
|
|
|
3,933
|
|
|
43,020
|
|
|
52,864
|
|
|
|
|
|
|
|
|
|
|
Earnings from
discontinued operations before income taxes
|
|
101
|
|
|
1,037
|
|
|
22,946
|
|
|
2,287
|
|
Income
taxes
|
|
16
|
|
|
393
|
|
|
8,903
|
|
|
855
|
|
Earnings from
discontinued operations
|
|
85
|
|
|
644
|
|
|
14,043
|
|
|
1,432
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
11,144
|
|
|
4,577
|
|
|
57,063
|
|
|
54,296
|
|
Less net
earnings attributable to noncontrolling interests
|
|
1
|
|
|
â
|
|
|
1
|
|
|
2
|
|
Net
earnings attributable to CMC
|
|
$
|
11,143
|
|
|
$
|
4,577
|
|
|
$
|
57,062
|
|
|
$
|
54,294
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to CMC:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.37
|
|
|
$
|
0.46
|
|
Earnings from
discontinued operations
|
|
â
|
|
|
0.01
|
|
|
0.12
|
|
|
0.01
|
|
Net
earnings
|
|
$
|
0.09
|
|
|
$
|
0.04
|
|
|
$
|
0.49
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to CMC:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
$
|
0.36
|
|
|
$
|
0.45
|
|
Earnings from
discontinued operations
|
|
â
|
|
|
0.01
|
|
|
0.12
|
|
|
0.01
|
|
Net
earnings
|
|
$
|
0.09
|
|
|
$
|
0.04
|
|
|
$
|
0.48
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.24
|
|
|
$
|
0.24
|
|
Average basic shares
outstanding
|
|
117,424,962
|
|
|
116,586,100
|
|
|
117,247,731
|
|
|
116,461,302
|
|
Average diluted
shares outstanding
|
|
118,639,161
|
|
|
117,573,052
|
|
|
118,397,886
|
|
|
117,333,339
|
|
|
|
|
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(in
thousands)
|
|
February 28,
2014
|
|
August 31,
2013
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
431,754
|
|
|
$
|
378,770
|
|
Accounts receivable,
net
|
|
838,597
|
|
|
989,694
|
|
Inventories,
net
|
|
980,643
|
|
|
757,417
|
|
Other
|
|
167,498
|
|
|
240,314
|
|
Total current
assets
|
|
2,418,492
|
|
|
2,366,195
|
|
Net property, plant
and equipment
|
|
934,529
|
|
|
940,237
|
|
Goodwill
|
|
69,790
|
|
|
69,579
|
|
Other
assets
|
|
121,666
|
|
|
118,790
|
|
Total
assets
|
|
$
|
3,544,477
|
|
|
$
|
3,494,801
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable-trade
|
|
$
|
383,958
|
|
|
$
|
342,678
|
|
Accounts
payable-documentary letters of credit
|
|
117,222
|
|
|
112,281
|
|
Accrued expenses and
other payables
|
|
250,013
|
|
|
314,949
|
|
Notes
payable
|
|
8,538
|
|
|
5,973
|
|
Current maturities of
long-term debt
|
|
6,776
|
|
|
5,228
|
|
Total current
liabilities
|
|
766,507
|
|
|
781,109
|
|
Deferred income
taxes
|
|
49,071
|
|
|
46,558
|
|
Other long-term
liabilities
|
|
116,221
|
|
|
118,165
|
|
Long-term
debt
|
|
1,276,759
|
|
|
1,278,814
|
|
Total
liabilities
|
|
2,208,558
|
|
|
2,224,646
|
|
Stockholders' equity
attributable to CMC
|
|
1,335,830
|
|
|
1,269,999
|
|
Stockholders' equity
attributable to noncontrolling interests
|
|
89
|
|
|
156
|
|
Total stockholders'
equity
|
|
1,335,919
|
|
|
1,270,155
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,544,477
|
|
|
$
|
3,494,801
|
|
|
|
|
|
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
Six Months Ended
February 28,
|
(in
thousands)
|
|
2014
|
|
2013
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
|
57,063
|
|
|
$
|
54,296
|
|
Adjustments to
reconcile net earnings to cash flows from (used by) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
67,284
|
|
|
68,037
|
|
Provision for losses
(recoveries) on receivables, net
|
|
(1,871)
|
|
|
2,463
|
|
Share-based
compensation
|
|
10,788
|
|
|
7,185
|
|
Amortization of
interest rate swaps termination gain
|
|
(3,799)
|
|
|
(5,815)
|
|
Deferred income
taxes
|
|
18,550
|
|
|
29,362
|
|
Tax benefits from
stock plans
|
|
(484)
|
|
|
(1)
|
|
Net gain on sale
of a subsidiary, cost method investment and other
|
|
(28,046)
|
|
|
(26,522)
|
|
Asset
impairment
|
|
1,227
|
|
|
3,028
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
20,195
|
|
|
4,785
|
|
Accounts receivable
sold, net
|
|
149,832
|
|
|
(37,297)
|
|
Inventories
|
|
(214,318)
|
|
|
(83,056)
|
|
Other
assets
|
|
(14,314)
|
|
|
11,461
|
|
Accounts payable,
accrued expenses and other payables
|
|
(21,861)
|
|
|
(73,764)
|
|
Other long-term
liabilities
|
|
(3,863)
|
|
|
(5,326)
|
|
Net cash flows from
(used by) operating activities
|
|
36,383
|
|
|
(51,164)
|
|
|
|
|
|
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(36,223)
|
|
|
(41,849)
|
|
Proceeds from the
sale of property, plant and equipment and other
|
|
6,381
|
|
|
6,897
|
|
Proceeds from the
sale of a subsidiary
|
|
52,276
|
|
|
â
|
|
Proceeds from the
sale of cost method investment
|
|
â
|
|
|
28,995
|
|
Net cash flows from
(used by) investing activities
|
|
22,434
|
|
|
(5,957)
|
|
|
|
|
|
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Increase (decrease)
in documentary letters of credit, net
|
|
4,767
|
|
|
(30,816)
|
|
Short-term
borrowings, net change
|
|
2,565
|
|
|
21,870
|
|
Repayments on
long-term debt
|
|
(3,143)
|
|
|
(2,402)
|
|
Payments for debt
issuance costs
|
|
(430)
|
|
|
â
|
|
Decrease in
restricted cash
|
|
18,305
|
|
|
â
|
|
Stock issued under
incentive and purchase plans, net of forfeitures
|
|
(740)
|
|
|
2,353
|
|
Cash
dividends
|
|
(28,160)
|
|
|
(27,963)
|
|
Tax benefits from
stock plans
|
|
484
|
|
|
1
|
|
Contribution from
(purchase of) noncontrolling interests
|
|
(37)
|
|
|
10
|
|
Net cash flows from
(used by) financing activities
|
|
(6,389)
|
|
|
(36,947)
|
|
Effect of exchange
rate changes on cash
|
|
556
|
|
|
1,743
|
|
Increase (decrease)
in cash and cash equivalents
|
|
52,984
|
|
|
(92,325)
|
|
Cash and cash
equivalents at beginning of year
|
|
378,770
|
|
|
262,422
|
|
Cash and cash
equivalents at end of period
|
|
$
|
431,754
|
|
|
$
|
170,097
|
|
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 the Company. Adjusted operating
profit is the sum of our earnings from continuing operations before
income taxes, interest expense and discounts on sales of accounts
receivable. 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 the Company's operating performance.
Adjusted operating profit may be inconsistent with similar measures
presented by other companies.
|
|
Three Months Ended
February 28,
|
|
Six Months Ended
February 28,
|
(in
thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Earnings from
continuing operations
|
|
$
|
11,059
|
|
|
$
|
3,933
|
|
|
$
|
43,020
|
|
|
$
|
52,864
|
|
Income
taxes
|
|
3,866
|
|
|
4,308
|
|
|
18,957
|
|
|
26,497
|
|
Interest
expense
|
|
19,179
|
|
|
16,490
|
|
|
38,757
|
|
|
33,514
|
|
Discounts on sales of
accounts receivable
|
|
947
|
|
|
903
|
|
|
1,506
|
|
|
2,112
|
|
Adjusted operating
profit
|
|
35,051
|
|
|
25,634
|
|
|
102,240
|
|
|
114,987
|
|
Adjusted operating
profit from discontinued operations
|
|
101
|
|
|
1,037
|
|
|
22,946
|
|
|
2,287
|
|
Adjusted operating
profit
|
|
$
|
35,152
|
|
|
$
|
26,671
|
|
|
$
|
125,186
|
|
|
$
|
117,274
|
|
Adjusted EBITDA is a non-GAAP financial measure.
Adjusted EBITDA 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 the Company's largest recurring non-cash charge,
depreciation and amortization, as well as impairment charges, which
are also non-cash. Adjusted EBITDA should not be considered as an
alternative to net earnings or as a better measure of liquidity
than 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 the Company'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
February 28,
|
|
Six Months Ended
February 28,
|
(in
thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Earnings from
continuing operations
|
|
$
|
11,059
|
|
|
$
|
3,933
|
|
|
$
|
43,020
|
|
|
$
|
52,864
|
|
Less net earnings
attributable to noncontrolling interests
|
|
1
|
|
|
â
|
|
|
1
|
|
|
2
|
|
Interest
expense
|
|
19,179
|
|
|
16,490
|
|
|
38,757
|
|
|
33,514
|
|
Income
taxes
|
|
3,866
|
|
|
4,308
|
|
|
18,957
|
|
|
26,497
|
|
Depreciation and
amortization
|
|
33,424
|
|
|
33,572
|
|
|
67,284
|
|
|
66,603
|
|
Impairment
charges
|
|
222
|
|
|
â
|
|
|
902
|
|
|
3,028
|
|
Adjusted EBITDA from
continuing operations
|
|
67,749
|
|
|
58,303
|
|
|
168,919
|
|
|
182,504
|
|
Adjusted EBITDA from
discontinued operations
|
|
101
|
|
|
1,751
|
|
|
23,271
|
|
|
3,721
|
|
Adjusted
EBITDA
|
|
$
|
67,850
|
|
|
$
|
60,054
|
|
|
$
|
192,190
|
|
|
$
|
186,225
|
|
Adjusted EBITDA to
interest expense for the quarter ended February 28,
2014:
|
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)
|
|
February 28,
2014
|
Stockholders' equity
attributable to CMC
|
|
$
|
1,335,830
|
|
Long-term
debt
|
|
1,276,759
|
|
Deferred income
taxes
|
|
49,071
|
|
Total
capitalization
|
|
$
|
2,661,660
|
|
OTHER FINANCIAL INFORMATION
Long-term debt to
capitalization ratio as of February 28, 2014:
|
|
$1,276,759
|
/
|
$2,661,660
|
=
|
48.0%
|
Total debt to
capitalization plus short-term debt plus notes payable ratio as of
February 28, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($1,276,759
|
+
|
$6,776
|
+
|
$8,538)
|
/
|
($2,661,660
|
+
|
$6,776
|
+
|
$8,538)
|
=
|
48.3%
|
Current ratio as
of February 28, 2014:
|
Current assets
divided by current liabilities
|
|
|
|
|
|
$2,418,492
|
/
|
$766,507
|
=
|
3.2
|
SOURCE Commercial Metals Company