CMC REPORTS THIRD QUARTER FISCAL 2024 RESULTS
-
Third
quarter net earnings of
$119.4 million , or$1.02 per diluted share -
Consolidated core EBITDA of
$256.1 million ; core EBITDA margin of 12.3% -
Solid seasonal demand and underlying market fundamentals in
North America supported healthy shipment volumes and product margins - Stable North American downstream backlog volumes due to robust pipeline of new construction projects
- Emerging Businesses Group adjusted EBITDA and adjusted EBITDA margin rebounded sharply, reflecting continued strong demand for our high margin construction solutions
-
Europe Steel Group achieved near breakeven results, continuing the trend of improving performance despite a challenging market backdrop
"Adjusted EBITDA," "core EBITDA," "core EBITDA margin," "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.
"We continued to advance the ramp up of our state-of-the-art
The Company's balance sheet and liquidity position remained strong. As of
On
Business Segments - Fiscal Third Quarter 2024 Review
Despite historically high levels of rain, North American demand for CMC's products was good during the quarter, showing a typical seasonal uplift from the winter months into spring.
Adjusted EBITDA for the
Emerging Businesses Group third quarter net sales of
Outlook
Conference Call
CMC invites you to listen to a live broadcast of its third quarter fiscal 2024 conference call today,
About CMC
CMC is an innovative solutions provider helping build a stronger, safer, and more sustainable world. Through an extensive manufacturing network principally located in
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 growth provided by acquisitions and strategic investments, demand for our products, shipment volumes, metal margins, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, growth rates in certain segments, product margins within our
The Company's 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
COMMERCIAL METALS COMPANY AND SUBSIDIARIES FINANCIAL & OPERATING STATISTICS (UNAUDITED) |
||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||
(in thousands, except per ton amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers |
|
|
|
|
|
|
|
|
|
|
|
$ 4,750,210 |
|
$ 4,986,326 |
Adjusted EBITDA |
|
246,304 |
|
222,294 |
|
266,820 |
|
336,843 |
|
367,561 |
|
735,418 |
|
991,588 |
Adjusted EBITDA margin |
|
14.7 % |
|
15.0 % |
|
16.8 % |
|
19.6 % |
|
20.2 % |
|
15.5 % |
|
19.9 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons shipped |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
|
371 |
|
347 |
|
374 |
|
344 |
|
409 |
|
1,092 |
|
1,046 |
Rebar |
|
520 |
|
460 |
|
522 |
|
542 |
|
539 |
|
1,502 |
|
1,425 |
Merchant bar and other |
|
244 |
|
234 |
|
230 |
|
215 |
|
249 |
|
708 |
|
727 |
Steel products |
|
764 |
|
694 |
|
752 |
|
757 |
|
788 |
|
2,210 |
|
2,152 |
Downstream products |
|
371 |
|
316 |
|
346 |
|
387 |
|
382 |
|
1,033 |
|
1,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price per ton |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials |
|
$ 970 |
|
$ 880 |
|
$ 783 |
|
$ 838 |
|
$ 833 |
|
$ 877 |
|
$ 841 |
Steel products |
|
891 |
|
905 |
|
892 |
|
932 |
|
979 |
|
896 |
|
994 |
Downstream products |
|
1,330 |
|
1,358 |
|
1,389 |
|
1,428 |
|
1,452 |
|
1,358 |
|
1,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of raw materials per ton |
|
$ 717 |
|
$ 658 |
|
$ 578 |
|
$ 606 |
|
$ 619 |
|
$ 651 |
|
$ 617 |
Cost of ferrous scrap utilized per ton |
|
$ 353 |
|
$ 379 |
|
$ 343 |
|
$ 338 |
|
$ 384 |
|
$ 358 |
|
$ 352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal margin per ton |
|
$ 538 |
|
$ 526 |
|
$ 549 |
|
$ 594 |
|
$ 595 |
|
$ 538 |
|
$ 642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers |
|
$ 208,806 |
|
$ 192,500 |
|
$ 225,175 |
|
$ 273,961 |
|
$ 330,767 |
|
$ 626,481 |
|
$ 1,054,830 |
Adjusted EBITDA |
|
(4,192) |
|
(8,611) |
|
38,942 |
|
(30,081) |
|
5,837 |
|
26,139 |
|
78,554 |
Adjusted EBITDA margin |
|
(2.0) % |
|
(4.5) % |
|
17.3 % |
|
(11.0) % |
|
1.8 % |
|
4.2 % |
|
7.4 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External tons shipped |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebar |
|
80 |
|
64 |
|
122 |
|
151 |
|
146 |
|
266 |
|
533 |
Merchant bar and other |
|
217 |
|
211 |
|
221 |
|
238 |
|
283 |
|
649 |
|
805 |
Steel products |
|
297 |
|
275 |
|
343 |
|
389 |
|
429 |
|
915 |
|
1,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price per ton |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products |
|
$ 681 |
|
$ 673 |
|
$ 633 |
|
$ 682 |
|
$ 753 |
|
$ 661 |
|
$ 768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of ferrous scrap utilized per ton |
|
$ 389 |
|
$ 394 |
|
$ 365 |
|
$ 398 |
|
$ 427 |
|
$ 383 |
|
$ 395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel products metal margin per ton |
|
$ 292 |
|
$ 279 |
|
$ 268 |
|
$ 284 |
|
$ 326 |
|
$ 278 |
|
$ 373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Businesses Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers |
|
$ 188,593 |
|
$ 155,994 |
|
$ 177,239 |
|
$ 208,559 |
|
$ 189,055 |
|
$ 521,826 |
|
$ 513,187 |
Adjusted EBITDA |
|
38,220 |
|
17,929 |
|
30,862 |
|
42,612 |
|
38,395 |
|
87,011 |
|
96,372 |
Adjusted EBITDA margin |
|
20.3 % |
|
11.5 % |
|
17.4 % |
|
20.4 % |
|
20.3 % |
|
16.7 % |
|
18.8 % |
COMMERCIAL METALS COMPANY AND SUBSIDIARIES BUSINESS SEGMENTS (UNAUDITED) |
||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to external customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
208,806 |
|
192,500 |
|
225,175 |
|
273,961 |
|
330,767 |
|
626,481 |
|
1,054,830 |
Emerging Businesses Group |
|
188,593 |
|
155,994 |
|
177,239 |
|
208,559 |
|
189,055 |
|
521,826 |
|
513,187 |
Corporate and Other |
|
9,728 |
|
13,591 |
|
7,987 |
|
8,729 |
|
6,776 |
|
31,306 |
|
35,962 |
Total net sales to external customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 246,304 |
|
$ 222,294 |
|
$ 266,820 |
|
$ 336,843 |
|
$ 367,561 |
|
$ 735,418 |
|
$ 991,588 |
|
|
(4,192) |
|
(8,611) |
|
38,942 |
|
(30,081) |
|
5,837 |
|
26,139 |
|
78,554 |
Emerging Businesses Group |
|
38,220 |
|
17,929 |
|
30,862 |
|
42,612 |
|
38,395 |
|
87,011 |
|
96,372 |
Corporate and Other |
|
(37,070) |
|
(34,512) |
|
(30,987) |
|
(38,171) |
|
(37,715) |
|
(102,569) |
|
(93,013) |
Total adjusted EBITDA |
|
$ 243,262 |
|
$ 197,100 |
|
$ 305,637 |
|
$ 311,203 |
|
$ 374,078 |
|
$ 745,999 |
|
|
COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) |
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands, except share and per share data) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Net sales |
|
$ 2,078,485 |
|
$ 2,344,989 |
|
$ 5,929,823 |
|
$ 6,590,305 |
Costs and operating expenses: |
|
|
|
|
|
|
|
|
Cost of goods sold |
|
1,738,086 |
|
1,862,299 |
|
4,894,200 |
|
5,203,476 |
Selling, general and administrative expenses |
|
167,975 |
|
163,742 |
|
497,951 |
|
470,902 |
Interest expense |
|
12,117 |
|
8,878 |
|
35,751 |
|
31,868 |
Net costs and operating expenses |
|
1,918,178 |
|
2,034,919 |
|
5,427,902 |
|
5,706,246 |
Earnings before income taxes |
|
160,307 |
|
310,070 |
|
501,921 |
|
884,059 |
Income taxes |
|
40,867 |
|
76,099 |
|
120,361 |
|
208,465 |
Net earnings |
|
$ 119,440 |
|
$ 233,971 |
|
$ 381,560 |
|
$ 675,594 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ 1.03 |
|
$ 2.00 |
|
$ 3.28 |
|
$ 5.76 |
Diluted |
|
1.02 |
|
1.98 |
|
3.25 |
|
5.69 |
|
|
|
|
|
|
|
|
|
Cash dividends per share |
|
$ 0.18 |
|
$ 0.16 |
|
$ 0.50 |
|
$ 0.48 |
Average basic shares outstanding |
|
115,529,942 |
|
117,066,623 |
|
116,228,826 |
|
117,192,710 |
Average diluted shares outstanding |
|
116,664,885 |
|
118,397,899 |
|
117,583,055 |
|
118,747,084 |
COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||
(in thousands, except share and per share data) |
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ 698,338 |
|
$ 592,332 |
Accounts receivable (less allowance for doubtful accounts of |
|
1,182,269 |
|
1,240,217 |
Inventories, net |
|
1,075,176 |
|
1,035,582 |
Prepaid and other current assets |
|
283,845 |
|
276,024 |
Total current assets |
|
3,239,628 |
|
3,144,155 |
Property, plant and equipment, net |
|
2,511,865 |
|
2,409,360 |
Intangible assets, net |
|
239,691 |
|
259,161 |
|
|
383,900 |
|
385,821 |
Other noncurrent assets |
|
335,147 |
|
440,597 |
Total assets |
|
$ 6,710,231 |
|
$ 6,639,094 |
Liabilities and stockholders' equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ 303,057 |
|
$ 364,390 |
Accrued expenses and other payables |
|
399,026 |
|
438,811 |
Current maturities of long-term debt and short-term borrowings |
|
62,871 |
|
40,513 |
Total current liabilities |
|
764,954 |
|
843,714 |
Deferred income taxes |
|
286,078 |
|
306,801 |
Other noncurrent liabilities |
|
262,535 |
|
253,181 |
Long-term debt |
|
1,137,602 |
|
1,114,284 |
Total liabilities |
|
2,451,169 |
|
2,517,980 |
Stockholders' equity: |
|
|
|
|
Common stock, par value |
|
1,290 |
|
1,290 |
Additional paid-in capital |
|
398,851 |
|
394,672 |
Accumulated other comprehensive loss |
|
(90,689) |
|
(3,778) |
Retained earnings |
|
4,420,633 |
|
4,097,262 |
Less treasury stock, 13,956,473 and 12,545,237 shares at cost |
|
(471,271) |
|
(368,573) |
Stockholders' equity |
|
4,258,814 |
|
4,120,873 |
Stockholders' equity attributable to non-controlling interests |
|
248 |
|
241 |
Total stockholders' equity |
|
4,259,062 |
|
4,121,114 |
Total liabilities and stockholders' equity |
|
$ 6,710,231 |
|
$ 6,639,094 |
COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||
|
|
Nine Months Ended |
||
(in thousands) |
|
2024 |
|
2023 |
Cash flows from (used by) operating activities: |
|
|
|
|
Net earnings |
|
$ 381,560 |
|
$ 675,594 |
Adjustments to reconcile net earnings to net cash flows from operating activities: |
|
|
|
|
Depreciation and amortization |
|
208,177 |
|
157,528 |
Stock-based compensation |
|
35,893 |
|
44,000 |
Write-down of inventory |
|
6,586 |
|
8,931 |
Deferred income taxes and other long-term taxes |
|
(4,066) |
|
34,815 |
Other |
|
3,684 |
|
6,179 |
Settlement of New Markets Tax Credit transaction |
|
— |
|
(17,659) |
Changes in operating assets and liabilities, net of acquisitions |
|
(83,943) |
|
25,291 |
Net cash flows from operating activities |
|
547,891 |
|
934,679 |
Cash flows from (used by) investing activities: |
|
|
|
|
Capital expenditures |
|
(242,803) |
|
(439,742) |
Acquisitions, net of cash acquired |
|
— |
|
(167,069) |
Other |
|
1,856 |
|
1,649 |
Net cash flows used by investing activities |
|
(240,947) |
|
(605,162) |
Cash flows from (used by) financing activities: |
|
|
|
|
Repayments of long-term debt |
|
(27,484) |
|
(380,700) |
Debt issuance and extinguishment |
|
— |
|
(1,896) |
Proceeds from accounts receivable facilities |
|
142,015 |
|
242,408 |
Repayments under accounts receivable facilities |
|
(122,284) |
|
(244,105) |
|
|
(128,164) |
|
(82,839) |
Tax withholdings related to share settlements, net of purchase plans |
|
(8,563) |
|
(13,665) |
Dividends |
|
(58,189) |
|
(56,257) |
Contribution from non-controlling interest |
|
7 |
|
9 |
Net cash flows used by financing activities |
|
(202,662) |
|
(537,045) |
Effect of exchange rate changes on cash |
|
511 |
|
6,970 |
Increase (decrease) in cash, restricted cash, and cash equivalents |
|
104,793 |
|
(200,558) |
Cash, restricted cash and cash equivalents at beginning of period |
|
595,717 |
|
679,243 |
Cash, restricted cash and cash equivalents at end of period |
|
$ 700,510 |
|
$ 478,685 |
|
|
|
|
|
Supplemental information: |
|
|
|
|
Cash paid for income taxes |
|
$ 131,229 |
|
$ 150,658 |
Cash paid for interest |
|
35,604 |
|
51,305 |
|
|
|
|
|
Cash and cash equivalents |
|
$ 698,338 |
|
$ 475,489 |
Restricted cash |
|
2,172 |
|
3,196 |
Total cash, restricted cash and cash equivalents |
|
$ 700,510 |
|
$ 478,685 |
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
This press release contains financial measures not derived in accordance with
Adjusted EBITDA, core EBITDA, core EBITDA margin and adjusted earnings are non-GAAP financial measures. Adjusted earnings per diluted share is defined as adjusted earnings on a diluted per share basis. Core EBITDA margin is defined as core EBITDA divided by net sales. The adjustment "Settlement of New Markets Tax Credit transaction" represents the recognition of deferred revenue from 2016 and 2017 resulting from the Company's participation in the New Markets Tax Credit program provided for in the Community Renewal Tax Relief Act of 2000 during the development of a micro mill, spooler and T-post shop located in eligible zones as determined by the
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 |
|
Nine Months Ended |
||||||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ 119,440 |
|
$ 85,847 |
|
$ 176,273 |
|
$ 184,166 |
|
$ 233,971 |
|
$ 381,560 |
|
$ 675,594 |
Interest expense |
|
12,117 |
|
11,878 |
|
11,756 |
|
8,259 |
|
8,878 |
|
35,751 |
|
31,868 |
Income taxes |
|
40,867 |
|
31,072 |
|
48,422 |
|
53,742 |
|
76,099 |
|
120,361 |
|
208,465 |
Depreciation and amortization |
|
70,692 |
|
68,299 |
|
69,186 |
|
61,302 |
|
55,129 |
|
208,177 |
|
157,528 |
Asset impairments |
|
146 |
|
4 |
|
— |
|
3,734 |
|
1 |
|
150 |
|
46 |
Adjusted EBITDA |
|
243,262 |
|
197,100 |
|
305,637 |
|
311,203 |
|
374,078 |
|
745,999 |
|
1,073,501 |
Non-cash equity compensation |
|
12,846 |
|
14,988 |
|
8,059 |
|
16,529 |
|
10,376 |
|
35,893 |
|
44,000 |
Settlement of New Markets Tax Credit transaction |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(17,659) |
Core EBITDA |
|
$ 256,108 |
|
$ 212,088 |
|
$ 313,696 |
|
$ 327,732 |
|
$ 384,454 |
|
$ 781,892 |
|
$ 1,099,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ 2,078,485 |
|
$ 1,848,287 |
|
$ 2,003,051 |
|
$ 2,209,228 |
|
$ 2,344,989 |
|
$ 5,929,823 |
|
$ 6,590,305 |
Core EBITDA margin |
|
12.3 % |
|
11.5 % |
|
15.7 % |
|
14.8 % |
|
16.4 % |
|
13.2 % |
|
16.7 % |
A reconciliation of net earnings to adjusted earnings is provided below:
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
|
$ 85,847 |
|
|
|
|
|
$ 233,971 |
|
$ 381,560 |
|
|
Asset impairments |
|
146 |
|
4 |
|
— |
|
3,734 |
|
1 |
|
150 |
|
46 |
Settlement of New Markets Tax Credit transaction |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(17,659) |
Total adjustments (pre-tax) |
|
$ 146 |
|
$ 4 |
|
$ — |
|
$ 3,734 |
|
$ 1 |
|
$ 150 |
|
$ (17,613) |
Related tax effects on adjustments |
|
(31) |
|
(1) |
|
— |
|
(784) |
|
— |
|
(32) |
|
3,699 |
Adjusted earnings |
|
|
|
$ 85,850 |
|
|
|
|
|
$ 233,972 |
|
$ 381,678 |
|
|
Net earnings per diluted share(1) |
|
$ 1.02 |
|
$ 0.73 |
|
$ 1.49 |
|
$ 1.56 |
|
$ 1.98 |
|
$ 3.25 |
|
$ 5.69 |
Adjusted earnings per diluted share(1) |
|
$ 1.02 |
|
$ 0.73 |
|
$ 1.49 |
|
$ 1.58 |
|
$ 1.98 |
|
$ 3.25 |
|
$ 5.57 |
|
|
__________________________________ |
|
(1) |
Net earnings per diluted share and adjusted earnings per diluted share are calculated independently for each three month period and may not sum to the year to date period due to rounding. |
View original content:https://www.prnewswire.com/news-releases/cmc-reports-third-quarter-fiscal-2024-results-302177630.html
SOURCE