IRVING, Texas, June 23, 2016 /PRNewswire/
-- Commercial Metals Company (NYSE: CMC) today announced
financial results for its third quarter ended May 31, 2016.
Earnings from continuing operations for the third quarter of fiscal
2016 were $35.1 million ($0.30 per diluted share) on net sales of
$1.2 billion. This compares to
earnings from continuing operations of $39.2
million ($0.34 per diluted
share) on net sales of $1.5 billion
for the third quarter of fiscal 2015. Net earnings attributable to
CMC for the three months ended May 31, 2016 were $19.3 million ($0.17 per diluted share), compared with net
earnings attributable to CMC of $28.7
million ($0.25 per diluted
share) for the third quarter ended May 31, 2015. Results for
the third quarter of fiscal 2016 included a non-cash impairment
charge on businesses held for sale in discontinued operations of
$15.8 million ($0.13 per diluted share).
Joe Alvarado, Chairman of the
Board, President, and CEO, commented, "We are pleased with our
results for our fiscal third quarter of 2016. We experienced
strong demand as four of our five segments reported increased
shipments. Our Americas Recycling and Americas Fabrication segments
continued to realize improvements in average metal margins,
compared to the third quarter of fiscal 2015."
Adjusted operating profit from continuing operations was
$60.9 million for the third quarter
of fiscal 2016, compared with adjusted operating profit from
continuing operations of $82.2
million for the third quarter of fiscal 2015. Adjusted
EBITDA from continuing operations was $92.5
million for the third quarter of fiscal 2016, compared with
adjusted EBITDA from continuing operations of $114.7 million for the third quarter of fiscal
2015. Adjusted operating profit from continuing operations and
adjusted EBITDA from continuing operations for the third quarter of
fiscal 2015 each included a $28.9
million net pre-tax benefit as a result of a termination of
a contract with a customer, partially offset by inventory
write-downs.
The Company's financial position at May 31, 2016 remained
strong with cash and cash equivalents of $483.9 million and total available liquidity in
excess of $1.0 billion. Additionally,
the Company had $49.5 million in
restricted cash primarily related to the construction of a new
steel micro-mill in Durant,
Oklahoma, which is included in other current assets in the
Company's unaudited condensed consolidated balance sheet as of
May 31, 2016. Cash flow generated from operations for the
third quarter of fiscal 2016 was strong at $174.1 million. We continuously evaluate the uses
of our cash to maximize total shareholder return, including debt
repayment, capital deployment, share repurchases and
dividends.
On June 22, 2016, the board of directors of CMC declared a
quarterly dividend of $0.12 per share
for shareholders of record on July 7, 2016. The dividend
will be paid on July 21, 2016.
Business Segments
The Americas Recycling segment recorded adjusted operating loss
of $2.0 million for the third quarter
of fiscal 2016 compared to adjusted operating loss of $3.7 million for the third quarter of fiscal
2015. The improved performance compared to the same period in the
prior fiscal year was primarily due to per ton margin expansions of
12% on nonferrous shipments and 6% on ferrous shipments. However,
nonferrous tons shipped decreased 11% while ferrous shipments held
steady compared to the third quarter of fiscal 2015, which resulted
in the third quarter of fiscal 2016 continuing to yield an adjusted
operating loss.
The Americas Mills segment recorded adjusted operating profit of
$55.0 million for the third quarter
of fiscal 2016 compared to adjusted operating profit of
$63.3 million for the corresponding
period in the prior fiscal year. Profitability in this segment
declined during the third quarter of fiscal 2016 compared to the
third quarter of fiscal 2015 due to 22% margin compression as the
average selling price decreased $111
per short ton, which more than offset a $31 per short ton decrease in the average cost of
ferrous scrap consumed.
The Americas Fabrication segment recorded adjusted operating
profit of $22.8 million for the third
quarter of fiscal 2016, which represented this segment's best
fiscal third quarter since the third quarter of fiscal 2007. This
compares to adjusted operating profit of $13.7 million for the third quarter of fiscal
2015. The increase in adjusted operating profit for the third
quarter of fiscal 2016 was primarily due to a decrease in average
composite material cost, which more than offset a decrease in the
average composite selling price and resulted in a 4% per short ton
increase in the average composite metal margin, compared to the
third quarter of fiscal 2015. Additionally, during the third
quarter of fiscal 2016, volumes for this segment increased 5%
compared to the same period in the prior fiscal year.
The International Mill segment recorded adjusted operating
profit of $5.5 million for the third
quarter of fiscal 2016 compared to adjusted operating profit of
$6.1 million for the corresponding
period in fiscal 2015. Adjusted operating profit for the third
quarter of fiscal 2016 decreased due to 3% margin compression as
the average selling price decreased $77 per short ton, which more than offset a
$71 per short ton decrease in the
average cost of ferrous scrap consumed.
The International Marketing and Distribution segment recorded
adjusted operating profit of $0.9
million for the third quarter of fiscal 2016 compared to
adjusted operating profit of $25.6
million for the same period in the prior fiscal year.
Adjusted operating profit for this segment included a $28.9 million net pre-tax benefit as a result of
a termination of a contract with a customer, partially offset by
inventory write-downs, in the third quarter of fiscal 2015.
Additionally, for the three months ended May 31, 2016,
employee-related expenses decreased approximately $9.0 million, partially offset by a 9% decline in
volumes and a decline in average margin compared to the three
months ended May 31, 2015.
Year to Date Results
Earnings from continuing operations for the nine months ended
May 31, 2016 were $71.6 million
($0.61 per diluted share) on net
sales of $3.4 billion, compared with
earnings from continuing operations of $86.9
million ($0.74 per diluted
share) on net sales of $4.6 billion
for the nine months ended May 31, 2015. Adjusted operating
profit from continuing operations was $147.0
million compared with $187.0
million for the nine months ended May 31, 2016 and
2015, respectively. Adjusted EBITDA from continuing operations was
$241.3 million for the nine months
ended May 31, 2016, compared with $285.6 million for the nine months ended
May 31, 2015.
During the first quarter of fiscal 2016, the Company elected to
change the accounting method it uses to value its inventories from
the last-in, first-out method to the weighted average cost method
for its Americas Mills, Americas Recycling and Americas Fabrication
segments and to the specific identification method for the steel
trading division headquartered in the U.S. in its International
Marketing and Distribution segment. The Company applied this change
in accounting principle retrospectively to all prior periods
presented. Also during the first quarter of fiscal 2016, the
Company elected to change the accounting method it uses to value
its inventories in its International Marketing and Distribution
segment, except for the steel trading division headquartered in the
U.S., from the first-in, first-out method to the specific
identification method. Because this change in accounting principle
was immaterial in all prior periods, it was not applied
retrospectively.
Outlook
Alvarado concluded, "We expect the results of our fiscal fourth
quarter to remain strong, consistent with the results of our fiscal
third quarter. Our key market indicators continue to point toward
strong demand in the U.S. construction markets. Non-residential
construction spending, which is our primary end use market in the
U.S., was up 5% year over year in April
2016. The Architecture Billings Index (ABI) remained above
50 for 24 of the 27 months ended May
2016, which has historically been a leading indicator of
improved non-residential construction. We expect to begin realizing
productivity and cost improvements in the fourth quarter of fiscal
2016 from key capital projects. Our balance sheet remains a key
strength of our Company, and we expect to finish fiscal 2016 well
positioned to continue the positive momentum into fiscal 2017."
Conference Call
CMC invites you to listen to a live broadcast of its third
quarter of fiscal 2016 conference call today, Thursday,
June 23, 2016, at 11:00 a.m.
ET. Joe Alvarado,
Chairman of the Board, President and CEO, Barbara Smith, COO, and Mary Lindsey, 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 U.S. construction activity,
demand for finished steel products and the effects of global steel
overcapacity and a strong U.S. dollar. 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 changed assumptions, the occurrence of
anticipated or unanticipated events, new information or
circumstances 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: the completion, if at all, or timing of
potential transactions, including the sale of our remaining steel
distribution assets located in Australia, the impact, if any, on our other
businesses of the non-cash impairment charge in our results from
discontinued operations and any potential gain or loss resulting
from the closure of the sale of our remaining steel distribution
assets located in Australia,
non-cash impairment charges in our results from continuing
operations,,global economic conditions, including the ongoing
recovery from the last recession and construction activity or lack
thereof, and their impact in a highly cyclical industry; rapid and
significant changes in the price of metals; excess capacity in our
industry, particularly in China,
and product availability from competing steel minimills and other
steel suppliers including import quantities and pricing; currency
fluctuations; 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' ability 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; global factors, including political
uncertainties and military conflicts; availability of electricity
and natural gas for minimill operations; information technology
interruptions and breaches in security data; ability to retain key
executives; 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 those factors listed
under Item 1A. "Risk Factors" included in the Company's Annual
Report filed on Form 10-K for the fiscal year ended August 31,
2015.
COMMERCIAL METALS
COMPANY
OPERATING
STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(short tons in
thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Americas Recycling
tons shipped
|
|
472
|
|
|
471
|
|
|
1,340
|
|
|
1,531
|
|
|
|
|
|
|
|
|
|
|
Americas Mills rebar
shipments
|
|
462
|
|
|
421
|
|
|
1,220
|
|
|
1,209
|
|
Americas Mills
merchant and other shipments
|
|
262
|
|
|
252
|
|
|
752
|
|
|
793
|
|
Total Americas
Mills tons shipped
|
|
724
|
|
|
673
|
|
|
1,972
|
|
|
2,002
|
|
|
|
|
|
|
|
|
|
|
Americas Mills
average FOB selling price (total sales)
|
|
$
|
501
|
|
|
$
|
612
|
|
|
$
|
522
|
|
|
$
|
653
|
|
Americas Mills
average cost ferrous scrap consumed
|
|
$
|
213
|
|
|
$
|
244
|
|
|
$
|
197
|
|
|
$
|
294
|
|
Americas Mills
metal margin
|
|
$
|
288
|
|
|
$
|
368
|
|
|
$
|
325
|
|
|
$
|
359
|
|
Americas Mills
average ferrous scrap purchase price
|
|
$
|
194
|
|
|
$
|
204
|
|
|
$
|
170
|
|
|
$
|
249
|
|
|
|
|
|
|
|
|
|
|
International Mill
tons shipped
|
|
353
|
|
|
323
|
|
|
913
|
|
|
898
|
|
|
|
|
|
|
|
|
|
|
International Mill
average FOB selling price (total sales)
|
|
$
|
378
|
|
|
$
|
455
|
|
|
$
|
382
|
|
|
$
|
493
|
|
International Mill
average cost ferrous scrap consumed
|
|
$
|
187
|
|
|
$
|
258
|
|
|
$
|
190
|
|
|
$
|
283
|
|
International Mill
metal margin
|
|
$
|
191
|
|
|
$
|
197
|
|
|
$
|
192
|
|
|
$
|
210
|
|
International Mill
average ferrous scrap purchase price
|
|
$
|
164
|
|
|
$
|
219
|
|
|
$
|
159
|
|
|
$
|
237
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
rebar tons shipped
|
|
270
|
|
|
260
|
|
|
744
|
|
|
732
|
|
Americas Fabrication
structural and post tons shipped
|
|
40
|
|
|
34
|
|
|
97
|
|
|
103
|
|
Total Americas
Fabrication tons shipped
|
|
310
|
|
|
294
|
|
|
841
|
|
|
835
|
|
|
|
|
|
|
|
|
|
|
Americas Fabrication
average selling price (excluding stock and buyout sales)
|
|
$
|
827
|
|
|
$
|
953
|
|
|
$
|
855
|
|
|
$
|
951
|
|
(in
thousands)
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
Net
sales
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Americas
Recycling
|
|
$
|
182,477
|
|
|
$
|
225,096
|
|
|
$
|
510,030
|
|
|
$
|
800,234
|
|
Americas
Mills
|
|
396,481
|
|
|
446,821
|
|
|
1,117,442
|
|
|
1,400,517
|
|
Americas
Fabrication
|
|
385,080
|
|
|
417,895
|
|
|
1,103,538
|
|
|
1,174,793
|
|
International
Mill
|
|
141,438
|
|
|
156,318
|
|
|
369,344
|
|
|
472,396
|
|
International
Marketing and Distribution
|
|
319,604
|
|
|
518,244
|
|
|
879,517
|
|
|
1,521,288
|
|
Corporate
|
|
4,585
|
|
|
601
|
|
|
4,109
|
|
|
4,150
|
|
Eliminations
|
|
(202,275)
|
|
|
(258,973)
|
|
|
(582,034)
|
|
|
(796,269)
|
|
Total net
sales
|
|
$
|
1,227,390
|
|
|
$
|
1,506,002
|
|
|
$
|
3,401,946
|
|
|
$
|
4,577,109
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
profit (loss)
|
|
|
|
|
|
|
|
|
Americas
Recycling
|
|
$
|
(1,978)
|
|
|
$
|
(3,651)
|
|
|
$
|
(16,171)
|
|
|
$
|
(15,260)
|
|
Americas
Mills
|
|
54,976
|
|
|
63,320
|
|
|
164,739
|
|
|
195,438
|
|
Americas
Fabrication
|
|
22,794
|
|
|
13,720
|
|
|
58,964
|
|
|
3,770
|
|
International
Mill
|
|
5,467
|
|
|
6,146
|
|
|
10,189
|
|
|
11,188
|
|
International
Marketing and Distribution
|
|
892
|
|
|
25,615
|
|
|
(3,570)
|
|
|
49,669
|
|
Corporate
|
|
(22,542)
|
|
|
(19,502)
|
|
|
(69,415)
|
|
|
(55,513)
|
|
Eliminations
|
|
1,331
|
|
|
(3,480)
|
|
|
2,233
|
|
|
(2,248)
|
|
Adjusted operating
profit from continuing operations
|
|
60,940
|
|
|
82,168
|
|
|
146,969
|
|
|
187,044
|
|
Adjusted operating
loss from discontinued operations
|
|
(15,749)
|
|
|
(10,604)
|
|
|
(16,676)
|
|
|
(19,180)
|
|
Adjusted operating
profit
|
|
$
|
45,191
|
|
|
$
|
71,564
|
|
|
$
|
130,293
|
|
|
$
|
167,864
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(in thousands,
except share data)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net sales
|
|
$
|
1,227,390
|
|
|
$
|
1,506,002
|
|
|
$
|
3,401,946
|
|
|
$
|
4,577,109
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
1,051,910
|
|
|
1,313,854
|
|
|
2,934,028
|
|
|
4,057,963
|
|
Selling, general and
administrative expenses
|
|
114,841
|
|
|
110,347
|
|
|
310,667
|
|
|
333,332
|
|
Loss on debt
extinguishment
|
|
115
|
|
|
—
|
|
|
11,480
|
|
|
—
|
|
Interest
expense
|
|
14,737
|
|
|
20,519
|
|
|
49,666
|
|
|
58,828
|
|
|
|
1,181,603
|
|
|
1,444,720
|
|
|
3,305,841
|
|
|
4,450,123
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
45,787
|
|
|
61,282
|
|
|
96,105
|
|
|
126,986
|
|
Income
taxes
|
|
10,676
|
|
|
22,126
|
|
|
24,512
|
|
|
40,100
|
|
Earnings from
continuing operations
|
|
35,111
|
|
|
39,156
|
|
|
71,593
|
|
|
86,886
|
|
|
|
|
|
|
|
|
|
|
Loss from
discontinued operations before income tax benefit
|
|
(15,785)
|
|
|
(10,871)
|
|
|
(16,803)
|
|
|
(20,241)
|
|
Income tax
benefit
|
|
(2)
|
|
|
(424)
|
|
|
(103)
|
|
|
(445)
|
|
Loss from
discontinued operations
|
|
(15,783)
|
|
|
(10,447)
|
|
|
(16,700)
|
|
|
(19,796)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
earnings
|
|
19,328
|
|
|
28,709
|
|
|
54,893
|
|
|
67,090
|
|
Less net earnings
attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
earnings attributable to CMC
|
|
$
|
19,328
|
|
|
$
|
28,709
|
|
|
$
|
54,893
|
|
|
$
|
67,090
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share attributable to CMC:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.31
|
|
|
$
|
0.34
|
|
|
$
|
0.62
|
|
|
$
|
0.74
|
|
Loss from
discontinued operations
|
|
(0.14)
|
|
|
(0.09)
|
|
|
(0.14)
|
|
|
(0.17)
|
|
Net
earnings
|
|
$
|
0.17
|
|
|
$
|
0.25
|
|
|
$
|
0.48
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share attributable to CMC:
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
|
$
|
0.30
|
|
|
$
|
0.34
|
|
|
$
|
0.61
|
|
|
$
|
0.74
|
|
Loss from
discontinued operations
|
|
(0.13)
|
|
|
(0.09)
|
|
|
(0.14)
|
|
|
(0.17)
|
|
Net
earnings
|
|
$
|
0.17
|
|
|
$
|
0.25
|
|
|
$
|
0.47
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
0.36
|
|
|
$
|
0.36
|
|
Average basic shares
outstanding
|
|
114,677,109
|
|
|
115,742,534
|
|
|
115,373,736
|
|
|
116,807,469
|
|
Average diluted
shares outstanding
|
|
115,995,515
|
|
|
116,759,215
|
|
|
116,758,716
|
|
|
117,871,228
|
|
COMMERCIAL METALS
COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in
thousands)
|
|
May 31,
2016
|
|
August 31,
2015
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
483,855
|
|
|
$
|
485,323
|
|
Accounts receivable,
net
|
|
740,283
|
|
|
900,619
|
|
Inventories,
net
|
|
661,563
|
|
|
880,484
|
|
Current deferred tax
assets
|
|
—
|
|
|
3,310
|
|
Other current
assets
|
|
144,967
|
|
|
93,643
|
|
Assets of businesses
held for sale
|
|
587
|
|
|
17,008
|
|
Total current
assets
|
|
2,031,255
|
|
|
2,380,387
|
|
Net property, plant
and equipment
|
|
890,085
|
|
|
883,650
|
|
Goodwill
|
|
66,333
|
|
|
66,383
|
|
Other noncurrent
assets
|
|
123,013
|
|
|
115,168
|
|
Total
assets
|
|
$
|
3,110,686
|
|
|
$
|
3,445,588
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable-trade
|
|
$
|
235,385
|
|
|
$
|
260,984
|
|
Accounts
payable-documentary letters of credit
|
|
1,327
|
|
|
41,473
|
|
Accrued expenses and
other payables
|
|
236,009
|
|
|
290,677
|
|
Notes
payable
|
|
—
|
|
|
20,090
|
|
Current maturities of
long-term debt
|
|
10,929
|
|
|
10,110
|
|
Liabilities of
businesses held for sale
|
|
3,704
|
|
|
5,276
|
|
Total current
liabilities
|
|
487,354
|
|
|
628,610
|
|
Deferred income
taxes
|
|
76,340
|
|
|
55,803
|
|
Other long-term
liabilities
|
|
115,837
|
|
|
101,919
|
|
Long-term
debt
|
|
1,067,693
|
|
|
1,277,882
|
|
Total
liabilities
|
|
1,747,224
|
|
|
2,064,214
|
|
Stockholders' equity
attributable to CMC
|
|
1,363,303
|
|
|
1,381,225
|
|
Stockholders' equity
attributable to noncontrolling interests
|
|
159
|
|
|
149
|
|
Total stockholders'
equity
|
|
1,363,462
|
|
|
1,381,374
|
|
Total liabilities and
stockholders' equity
|
|
$
|
3,110,686
|
|
|
$
|
3,445,588
|
|
COMMERCIAL METALS
COMPANY AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
Nine Months Ended
May 31,
|
(in
thousands)
|
|
2016
|
|
2015
|
Cash flows from (used
by) operating activities:
|
|
|
|
|
Net
earnings
|
|
$
|
54,893
|
|
|
$
|
67,090
|
|
Adjustments to
reconcile net earnings to cash flows from (used by) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
95,423
|
|
|
99,829
|
|
Provision for losses
on receivables, net
|
|
3,748
|
|
|
2,525
|
|
Stock-based
compensation
|
|
19,889
|
|
|
18,288
|
|
Amortization of
interest rate swaps termination gain
|
|
(5,698)
|
|
|
(5,698)
|
|
Loss on debt
extinguishment
|
|
11,480
|
|
|
—
|
|
Deferred income
taxes
|
|
9,744
|
|
|
(19,594)
|
|
Tax benefit from
stock plans
|
|
(666)
|
|
|
(122)
|
|
Net gain on sale
of assets and other
|
|
(1,802)
|
|
|
(1,737)
|
|
Write-down of
inventories
|
|
9,567
|
|
|
21,535
|
|
Asset
impairment
|
|
15,842
|
|
|
3,390
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
146,166
|
|
|
90,412
|
|
Advance payments on
sale of accounts receivable program, net
|
|
1,473
|
|
|
(98,033)
|
|
Inventories
|
|
205,717
|
|
|
2,934
|
|
Other
assets
|
|
(6,729)
|
|
|
11,636
|
|
Accounts payable,
accrued expenses and other payables
|
|
(64,676)
|
|
|
(128,065)
|
|
Other long-term
liabilities
|
|
12,497
|
|
|
(5,601)
|
|
Net cash flows from
operating activities
|
|
506,868
|
|
|
58,789
|
|
|
|
|
|
|
Cash flows from (used
by) investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(104,481)
|
|
|
(75,976)
|
|
Increase in
restricted cash
|
|
(49,094)
|
|
|
—
|
|
Proceeds from the
sale of property, plant and equipment and other
|
|
3,470
|
|
|
10,143
|
|
Proceeds from the
sale of subsidiaries
|
|
—
|
|
|
2,354
|
|
Net cash flows used
by investing activities
|
|
(150,105)
|
|
|
(63,479)
|
|
|
|
|
|
|
Cash flows from (used
by) financing activities:
|
|
|
|
|
Repayments on
long-term debt
|
|
(208,605)
|
|
|
(8,038)
|
|
Cash
dividends
|
|
(41,586)
|
|
|
(42,073)
|
|
Increase (decrease)
in documentary letters of credit, net
|
|
(40,145)
|
|
|
51,722
|
|
Treasury stock
acquired
|
|
(30,595)
|
|
|
(41,806)
|
|
Short-term
borrowings, net change
|
|
(20,090)
|
|
|
(7,492)
|
|
Debt extinguishment
costs
|
|
(11,127)
|
|
|
—
|
|
Stock issued under
incentive and purchase plans, net of forfeitures
|
|
(6,036)
|
|
|
(1,389)
|
|
Decrease in
restricted cash
|
|
1
|
|
|
3,630
|
|
Contribution from
noncontrolling interests
|
|
29
|
|
|
38
|
|
Tax benefit from
stock plans
|
|
666
|
|
|
122
|
|
Net cash flows used
by financing activities
|
|
(357,488)
|
|
|
(45,286)
|
|
Effect of exchange
rate changes on cash
|
|
(743)
|
|
|
(3,943)
|
|
Decrease in cash and
cash equivalents
|
|
(1,468)
|
|
|
(53,919)
|
|
Cash and cash
equivalents at beginning of year
|
|
$
|
485,323
|
|
|
$
|
434,925
|
|
Cash and cash
equivalents at end of period
|
|
$
|
483,855
|
|
|
$
|
381,006
|
|
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 Earnings per Share is a non-GAAP financial
measure. Management believes excluding the costs associated with
the senior note tender offers closed on February 17, 2016 provides investors with a
clearer perspective of the current underlying operating
performance. Adjusted earnings per share may be inconsistent with
similar measures presented by other companies.
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
May 31,
2016
|
|
May 31,
2016
|
Diluted net earnings
per share attributable to CMC
|
|
$
|
0.17
|
|
|
$
|
0.47
|
|
Impact of cost of
debt extinguishment
|
|
—
|
|
|
0.10
|
|
Income tax
effect
|
|
—
|
|
|
(0.04)
|
|
Adjusted earnings per
share
|
|
$
|
0.17
|
|
|
$
|
0.53
|
|
Adjusted Operating Profit is a non-GAAP financial
measure. Management uses adjusted operating profit to evaluate the
financial performance of CMC. Adjusted operating profit is the sum
of adjusted operating profit from continuing operations and
adjusted operating loss from discontinued operations. Adjusted
operating profit from continuing operations is the sum of our
earnings from continuing operations before income taxes, interest
expense and discounts on sales of accounts receivable. Adjusted
operating loss from discontinued operations is the sum of our loss
from discontinued operations before income taxes (benefit),
interest expense and discounts on sales of accounts receivable. 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 CMC's operating performance. Adjusted
operating profit may be inconsistent with similar measures
presented by other companies.
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(in
thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Earnings from
continuing operations
|
|
$
|
35,111
|
|
|
$
|
39,156
|
|
|
$
|
71,593
|
|
|
$
|
86,886
|
|
Income
taxes
|
|
10,676
|
|
|
22,126
|
|
|
24,512
|
|
|
40,100
|
|
Interest
expense
|
|
14,737
|
|
|
20,519
|
|
|
49,666
|
|
|
58,828
|
|
Discounts on sales of
accounts receivable
|
|
416
|
|
|
367
|
|
|
1,198
|
|
|
1,230
|
|
Adjusted operating
profit from continuing operations
|
|
60,940
|
|
|
82,168
|
|
|
146,969
|
|
|
187,044
|
|
Adjusted operating
loss from discontinued operations
|
|
(15,749)
|
|
|
(10,604)
|
|
|
(16,676)
|
|
|
(19,180)
|
|
Adjusted operating
profit
|
|
$
|
45,191
|
|
|
$
|
71,564
|
|
|
$
|
130,293
|
|
|
$
|
167,864
|
|
Adjusted EBITDA is a non-GAAP financial measure. Adjusted
EBITDA is the sum of adjusted EBITDA from continuing operations and
adjusted EBITDA from discontinued operations. There were no net
earnings attributable to noncontrolling interests during the three
and nine months ended May 31, 2016 and 2015. Adjusted EBITDA
from continuing operations is the sum of our earnings from
continuing operations before net earnings attributable to
noncontrolling interests, interest expense and income taxes. It
also excludes CMC's largest recurring non-cash charge, depreciation
and amortization, as well as impairment charges, which are also
non-cash. Adjusted EBITDA from discontinued operations is the sum
of our loss from discontinued operations before net earnings
attributable to noncontrolling interests, interest expense and
income taxes (benefit). It also excludes the largest recurring
non-cash charge from discontinued operations, depreciation and
amortization, as well as impairment charges from discontinued
operations, 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 net cash flows from operating activities, as
determined by GAAP. However, we believe that adjusted EBITDA
provides relevant and useful information, which is often used by
analysts, creditors and other interested parties in our industry.
Adjusted EBITDA to interest expense is a covenant test in certain
of CMC's debt agreements. Adjusted EBITDA is also the target
benchmark for our annual and long-term cash incentive performance
plans for management. Adjusted EBITDA may be inconsistent with
similar measures presented by other companies.
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
(in
thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Earnings from
continuing operations
|
|
$
|
35,111
|
|
|
$
|
39,156
|
|
|
$
|
71,593
|
|
|
$
|
86,886
|
|
Interest
expense
|
|
14,737
|
|
|
20,519
|
|
|
49,666
|
|
|
58,828
|
|
Income
taxes
|
|
10,676
|
|
|
22,126
|
|
|
24,512
|
|
|
40,100
|
|
Depreciation and
amortization
|
|
31,883
|
|
|
32,840
|
|
|
95,424
|
|
|
99,553
|
|
Impairment
charges
|
|
76
|
|
|
39
|
|
|
76
|
|
|
188
|
|
Adjusted EBITDA from
continuing operations
|
|
92,483
|
|
|
114,680
|
|
|
241,271
|
|
|
285,555
|
|
Adjusted EBITDA from
discontinued operations
|
|
143
|
|
|
(7,582)
|
|
|
(874)
|
|
|
(16,460)
|
|
Adjusted
EBITDA
|
|
$
|
92,626
|
|
|
$
|
107,098
|
|
|
$
|
240,397
|
|
|
$
|
269,095
|
|
Adjusted EBITDA to interest coverage ratio for the quarter
ended May 31, 2016:
Total liquidity is a non-GAAP financial measure and is
the sum of the Company's cash and cash equivalents and availability
under its revolving credit facility, U.S. and international
accounts receivables sales facilities and its uncommitted bank
lines of credit. The table below reflects the Company's cash and
cash equivalents, credit facilities and availability to
liquidity.
|
|
May 31,
2016
|
(in
thousands)
|
|
Total
Facility
|
|
Availability
|
Cash and cash
equivalents
|
|
$
|
483,855
|
|
|
$
|
483,855
|
|
Revolving credit
facility
|
|
350,000
|
|
|
348,337
|
|
U.S. receivables sale
facility
|
|
200,000
|
|
|
136,811
|
|
International
accounts receivable sales facilities
|
|
79,712
|
|
|
47,990
|
|
Bank credit
facilities — uncommitted
|
|
44,429
|
|
|
42,544
|
|
Total
liquidity
|
|
$
|
1,157,996
|
|
|
$
|
1,059,537
|
|
Total capitalization is a non-GAAP financial measure and
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)
|
|
May 31,
2016
|
Stockholders' equity
attributable to CMC
|
|
$
|
1,363,303
|
|
Long-term
debt
|
|
1,067,693
|
|
Deferred income
taxes
|
|
76,340
|
|
Total
capitalization
|
|
$
|
2,507,336
|
|
OTHER FINANCIAL INFORMATION
Long-term debt to capitalization ratio as of May 31,
2016:
$1,067,693
|
/
|
$2,507,336
|
=
|
42.6%
|
Total debt to capitalization plus short-term debt plus notes
payable ratio as of May 31, 2016:
($1,067,693
|
+
|
$10,929
|
+
|
$—)
|
|
/
|
($2,507,336
|
+
|
$10,929
|
+
|
$—)
|
|
=
|
42.8%
|
Current ratio as of May 31, 2016:
Current assets divided by current liabilities
$2,031,255
|
/
|
$487,354
|
=
|
4.2
|
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SOURCE Commercial Metals Company