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Commercial Metals Co

CMC Reports Third Quarter Fiscal 2025 Results

  • Third quarter net earnings of $83.1 million, or $0.73 per diluted share; adjusted earnings of $84.4 million, or $0.74 per diluted share
  • Consolidated core EBITDA of $204.1 million in the third quarter; core EBITDA margin of 10.1%
  • North American steel product metal margins inflected upward during the third quarter, exiting at a rate above the average for the period
  • Emerging Businesses Group profitability improved sequentially and year-over-year with adjusted EBITDA margin increasing to 20.7%
  • Europe Steel Group exceeded breakeven  on better market fundamentals and solid cost performance; emerging green shoots point to more improvement ahead
  • Transform, Advance, Grow ("TAG") program exceeding targeted EBITDA benefits; executing on initiatives with annual run-rate expected to exceed $100 million

IRVING, Texas , June 23, 2025 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) today announced financial results for its fiscal third quarter ended May 31, 2025.

Peter Matt, President and Chief Executive Officer, commented, "We achieved sequential improvement in our financial performance driven by better market conditions across each of our segments, including a meaningful tailwind from the upward inflection of steel product metal margins within the North America Steel Group and solid demand for the proprietary value added products offered by our Emerging Businesses Group.  Activity within domestic construction markets remained resilient as shown by our healthy shipment levels, robust bid volumes on new work in the pipeline, and stable downstream backlog. These factors, and our significant exposure to the large and growing U.S. public infrastructure market, give us confidence that CMC should perform well through the balance of our fiscal year."

Mr. Matt added, "Our TAG program, which represents a key pillar of our strategy, is gaining momentum and delivering solid contributions to CMC's financial results. Benefits related to TAG have exceeded our targets through the first three quarters of fiscal 2025, and we are increasingly confident regarding the ability of this program to drive sustained improvements to margins, cash flow, and returns on capital. By getting more out of our existing business through TAG and pursuing attractive organic and inorganic growth opportunities, we are positioning CMC to create meaningful value for our shareholders. The impact of our strategic efforts should be further magnified by powerful structural trends within our key end markets related to infrastructure investment, reshoring, artificial intelligence, energy transition and generation growth, and the need to address our nation's housing shortage."

Third quarter net earnings were $83.1 million, or $0.73 per diluted share, on net sales of $2.0 billion, compared to prior year period net earnings of $119.4 million, or $1.02 per diluted share, on net sales of $2.1 billion.

During the third quarter of fiscal 2025, the Company recorded estimated net after-tax charges of $1.3 million, primarily relating to interest expense on the judgment amount associated with the previously disclosed Pacific Steel Group litigation. Excluding these charges, third quarter adjusted earnings were $84.4 million, or $0.74 per diluted share, compared to adjusted earnings of $119.6 million, or $1.02 per diluted share, in the prior year period. "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.

The Company's balance sheet and liquidity position remained strong. As of May 31, 2025, cash and cash equivalents totaled $893.0 million, with available liquidity of over $1.7 billion. During the quarter, CMC repurchased 1,113,014 shares of common stock valued at $50.4 million in the aggregate. As of May 31, 2025, $254.9 million remained available under the current share repurchase authorization.

On June 18, 2025, the board of directors declared a quarterly dividend of $0.18 per share of CMC common stock payable to stockholders of record on June 30, 2025. The dividend, to be paid on July 9, 2025, marks the 243rd consecutive quarterly payment by the Company.

Business Segments - Fiscal Third Quarter 2025 Review
 Demand for the products of North America Steel Group was solid during the quarter. Shipments of finished steel products grew by 1.6% relative to the prior year period and increased by 10.4% relative to the second quarter, reflecting normal seasonality. The pipeline of potential future construction projects remained healthy as indicated by CMC's downstream bidding activity and the Dodge Momentum Index, which measures the value of projects entering the planning phase. Downstream backlog volumes were virtually unchanged on a year-over-year basis and finished the quarter at a level that should support solid downstream shipping levels during the 2025 construction season.  Shipments of merchant products (MBQ) grew compared to the third quarter of fiscal 2024 as CMC increased its ability to serve West Coast customers from the Arizona 2 micro mill.

Adjusted EBITDA for the North America Steel Group decreased to $186.0 million in the third quarter of fiscal 2025 from $246.3 million in the prior year period. The earnings reduction was driven by lower margins over scrap costs on steel products and downstream products, partially offset by TAG related benefits. These benefits reflect solid execution across a number of ongoing initiatives, including melt shop and rolling mill yield enhancement, scrap cost optimization, logistics optimization and reduced alloy consumption. Adjusted EBITDA margin for the North America Steel Group was 11.9%, down from 14.7% in the third quarter of fiscal 2024.

Margins on steel products inflected upward during the quarter, increasing by $23 per ton on a sequential basis. Compared to the second quarter, the average selling price for steel products improved by $45 per ton, which outpaced a $22 per ton rise in scrap costs. Within the quarter, CMC successfully maintained price levels achieved earlier in the calendar year despite meaningful reductions in scrap pricing in April and May. As a result of this dynamic, steel product metal margins exited the third quarter above the $499 per ton average for the period.

Emerging Businesses Group ("EBG") third quarter net sales of $197.5 million increased by 4.7% compared to the prior year period, while adjusted EBITDA for the segment of $40.9 million was up 7.0% year-over-year and 74.0% sequentially. Improved year-over-year segment profitability was driven by strong project-related shipments of Performance Reinforcing Steel, as CMC continues to experience growing demand for its proprietary corrosion-resistant solutions. Adjusted EBITDA declined modestly for Tensar due primarily to delays in certain projects.  Financial results remained largely unchanged for Construction Services and CMC Impact Metals, compared to the prior year period. Indications of future market conditions remained encouraging with pipeline measures such as project quotes and new planning activity at healthy levels. Adjusted EBITDA margin of 20.7% improved by 40 basis points compared to the prior year period and was the second highest on record.

Market conditions for the Europe Steel Group continued to improve in the third quarter, supported by solid Polish economic conditions and reduced import flows that helped establish a better balance of supply and demand.  Pricing trends improved across each of the segment's major product categories. The average selling price in the third quarter increased by $51 per ton compared to the second quarter and exited May nearly $70 per ton higher than the December low. Financial results continued to benefit from an extensive cost management program that has meaningfully reduced controllable costs.

Adjusted EBITDA for the Europe Steel Group increased to $3.6 million in the third quarter of fiscal 2025 from a loss of $4.2 million in the prior year period. Excluding the impact of energy cost rebates, third quarter results were the strongest in two years for the segment. The adjusted EBITDA margin for the Europe Steel Group of 1.5% increased from (2.0%) in the third quarter of fiscal 2024.

Outlook 
 Mr. Matt said, "We expect consolidated financial results in the fourth quarter of fiscal 2025 to improve compared to the third quarter. Finished steel shipments within the North America Steel Group are anticipated to follow normal seasonal trends, while our adjusted EBITDA margin is expected to increase sequentially on higher steel product margins over scrap. Based on project backlogs, we expect financial results for the Emerging Businesses Group will improve on both a sequential and year-over-year basis. Our Europe Steel Group will receive a CO2 credit of approximately $28 million during the fourth quarter as a result of recently signed Polish legislation that divided payments related to calendar 2024 energy cost rebates into two tranches.  We expect to receive the second tranche in the first quarter of fiscal 2026.  Excluding this credit, adjusted EBITDA for our Europe Steel Group should increase sequentially in the fourth quarter, as we continue to benefit from improved market fundamentals and extensive cost management efforts." 

Mr. Matt concluded, "I am excited by the long-term outlook for our company and the prospect of creating significant value for our shareholders. We have developed – and are executing on – a game-changing strategic plan that is expected to deliver meaningful and sustained enhancements to our margins, cash flow capabilities, and return on capital. We will achieve this by leveraging our TAG operational and commercial excellence program to get more out of our existing enterprise, by completing value-accretive organic growth projects, and by adding complementary early-stage construction solutions that provide attractive new growth platforms. We are confident these efforts will position our company to take full advantage of powerful structural trends in the domestic construction market for years to come."

Conference Call
 CMC invites you to listen to a live broadcast of its third quarter fiscal 2025 conference call today, Monday, June 23, 2025, at 11:00 a.m. ET. Peter Matt, 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 CMC
 CMC is an innovative solutions provider helping build a stronger, safer, and more sustainable world. Through an extensive manufacturing network principally located in the United States and Central Europe, we offer products and technologies to meet the critical reinforcement needs of the global construction sector. CMC's solutions support early-stage construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission.

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, particularly during periods of domestic mill start-ups. Additional factors include the future availability and cost of supplies of raw materials and energy for our operations, growth rates in certain reportable segments, product margins within our Emerging Businesses Group segment, share repurchases, legal proceedings, construction activity, international trade, the impact of geopolitical conditions, 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 anticipated benefits and timeline for execution of our growth plan and initiatives 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.

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 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, 2024, and Part II, Item 1A, "Risk Factors" of our subsequent quarterly reports on Form 10-Q, 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 downstream contracts within our vertically integrated steel operations 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 geopolitical conditions, including political turmoil and volatility, regional conflicts, terrorism and war on the global economy, inflation, energy supplies and raw materials; increased attention to environmental, social and governance ("ESG") matters, including any targets or other ESG, environmental justice or regulatory 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 crises 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, including those related to the Pacific Steel Group litigation and other legal proceedings discussed in Note 12, Commitments and Contingencies, in Part I, Item 1, Financial Statements and in Part II, Item 1, Legal Proceedings of our fiscal 2025 quarterly reports on Form 10-Q; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.

 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

FINANCIAL & OPERATING STATISTICS (UNAUDITED)



Three Months Ended


Nine Months Ended

(in thousands, except per ton amounts)


5/31/2025


2/28/2025


11/30/2024


8/31/2024


5/31/2024


5/31/2025


5/31/2024

North America Steel Group















Net sales to external customers


$ 1,562,286


$ 1,386,848


$ 1,518,637


$ 1,559,520


$ 1,671,358


$  4,467,771


$  4,750,210

Adjusted EBITDA


185,984


128,818


188,205


210,932


246,304


503,007


735,418

Adjusted EBITDA margin


11.9 %


9.3 %


12.4 %


13.5 %


14.7 %


11.3 %


15.5 %
















External tons shipped















Raw materials


385


312


339


360


371


1,036


1,092

Rebar


534


503


549


522


520


1,586


1,502

Merchant bar and other


264


243


241


237


244


748


708

Steel products


798


746


790


759


764


2,334


2,210

Downstream products


355


298


356


361


371


1,009


1,033
















Average selling price per ton















Raw materials


$           809


$           956


$           874


$           866


$           970


$           875


$           877

Steel products


859


814


812


843


891


829


896

Downstream products


1,212


1,221


1,259


1,311


1,330


1,231


1,358
















Cost of raw materials per ton


$           617


$           713


$           677


$           664


$           717


$           665


$           651

Cost of ferrous scrap utilized per ton


$           360


$           338


$           323


$           321


$           353


$           340


$           358
















Steel products metal margin per ton


$           499


$           476


$           489


$           522


$           538


$           489


$           538
















Europe Steel Group















Net sales to external customers


$   247,590


$   198,029


$   209,407


$   222,085


$   208,806


$   655,026


$   626,481

Adjusted EBITDA


3,593


752


25,839


(3,622)


(4,192)


30,184


26,139

Adjusted EBITDA margin


1.5 %


0.4 %


12.3 %


(1.6) %


(2.0) %


4.6 %


4.2 %
















External tons shipped















Rebar


88


100


107


98


80


295


266

Merchant bar and other


271


210


206


221


217


687


649

Steel products


359


310


313


319


297


982


915
















Average selling price per ton















Steel products


$           663


$           612


$           639


$           667


$           681


$          639


$           661
















Cost of ferrous scrap utilized per ton


$           370


$           337


$           370


$           383


$           389


$          360


$           383
















Steel products metal margin per ton


$           293


$           275


$           269


$           284


$           292


$          279


$           278
















Emerging Businesses Group















Net sales to external customers


$   197,454


$   158,864


$   169,415


$   195,571


$   188,593


$  525,733


$  521,826

Adjusted EBITDA


40,912


23,519


22,660


42,519


38,220


87,091


87,011

Adjusted EBITDA margin


20.7 %


14.8 %


13.4 %


21.7 %


20.3 %


16.6 %


16.7 %

 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

BUSINESS SEGMENTS (UNAUDITED)



Three Months Ended


Nine Months Ended

(in thousands)


5/31/2025


2/28/2025


11/30/2024


8/31/2024


5/31/2024


5/31/2025


5/31/2024

Net sales to external customers















North America Steel Group


$ 1,562,286


$ 1,386,848


$ 1,518,637


$ 1,559,520


$ 1,671,358


$ 4,467,771


$ 4,750,210

Europe Steel Group


247,590


198,029


209,407


222,085


208,806


655,026


626,481

Emerging Businesses Group


197,454


158,864


169,415


195,571


188,593


525,733


521,826

Corporate and Other


12,654


10,635


12,143


18,973


9,728


35,432


31,306

Total net sales to external customers


$ 2,019,984


$ 1,754,376


$ 1,909,602


$ 1,996,149


$ 2,078,485


$ 5,683,962


$ 5,929,823
















Adjusted EBITDA















North America Steel Group


$    185,984


$    128,818


$    188,205


$    210,932


$    246,304


$    503,007


$    735,418

Europe Steel Group


3,593


752


25,839


(3,622)


(4,192)


30,184


26,139

Emerging Businesses Group


40,912


23,519


22,660


42,519


38,220


87,091


87,011

Corporate and Other


(36,952)


(34,852)


(386,245)


(25,189)


(37,070)


(458,049)


(102,569)

Total adjusted EBITDA


$    193,537


$    118,237


$  (149,541)


$    224,640


$    243,262


$    162,233


$    745,999

 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED  STATEMENTS OF EARNINGS (LOSS) (UNAUDITED)



Three Months Ended May 31,


Nine Months Ended May 31,

(in thousands, except share and per share data)


2025


2024


2025


2024

Net sales


$       2,019,984


$         2,078,485


$        5,683,962


$          5,929,823

Costs and operating expenses:









Cost of goods sold


1,720,063


1,738,086


4,856,614


4,894,200

Selling, general and administrative expenses


175,769


167,975


521,187


497,951

Interest expense


10,864


12,117


33,353


35,751

Litigation expense


3,776


—


358,496


—

Net costs and operating expenses


1,910,472


1,918,178


5,769,650


5,427,902

Earnings (loss) before income taxes


109,512


160,307


(85,688)


501,921

Income tax expense (benefit)


26,386


40,867


(18,569)


120,361

Net earnings (loss)


$             83,126


$            119,440


$           (67,119)


$             381,560










Earnings (loss) per share:









Basic


$                 0.74


$                   1.03


$                (0.59)


$                    3.28

Diluted


0.73


1.02


(0.59)


3.25










Cash dividends per share


$                 0.18


$                   0.18


$                  0.54


$                    0.50

Average basic shares outstanding


112,700,136


115,529,942


113,437,950


116,228,826

Average diluted shares outstanding


113,559,456


116,664,885


113,437,950


117,583,055

 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share data)


May 31, 2025


August 31, 2024

Assets





Current assets:





Cash and cash equivalents


$             892,998


$            857,922

Accounts receivable (less allowance for doubtful accounts of $3,839 and $3,494)


1,155,995


1,158,946

Inventories, net


1,005,290


971,755

Prepaid and other current assets


303,222


285,489

Assets held for sale


1,204


18,656

Total current assets


3,358,709


3,292,768

Property, plant and equipment, net


2,690,050


2,577,136

Intangible assets, net


216,464


234,869

Goodwill


386,544


385,630

Other noncurrent assets


342,056


327,436

Total assets


$          6,993,823


$         6,817,839

Liabilities and stockholders' equity





Current liabilities:





Accounts payable


$             363,980


$            350,550

Accrued contingent litigation-related loss


358,496


—

Other accrued expenses and payables


411,546


445,514

Current maturities of long-term debt


41,394


38,786

Total current liabilities


1,175,416


834,850

Deferred income taxes


186,643


276,908

Other noncurrent liabilities


231,167


255,222

Long-term debt


1,302,835


1,150,835

Total liabilities


2,896,061


2,517,815

Stockholders' equity:





Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 112,159,119 and 114,104,057 shares


1,290


1,290

Additional paid-in capital


400,897


407,232

Accumulated other comprehensive loss


(33,538)


(85,952)

Retained earnings


4,375,466


4,503,885

Less treasury stock, 16,901,545 and 14,956,607 shares at cost


(646,613)


(526,679)

Stockholders' equity


4,097,502


4,299,776

Stockholders' equity attributable to non-controlling interests


260


248

Total stockholders' equity


4,097,762


4,300,024

Total liabilities and stockholders' equity


$          6,993,823


$         6,817,839

 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED  STATEMENTS OF CASH FLOWS (UNAUDITED)



Nine Months Ended May 31,

(in thousands)


2025


2024

Cash flows from (used by) operating activities:





Net earnings (loss)


$              (67,119)


$             381,560

Adjustments to reconcile net earnings (loss) to net cash flows from operating activities:





Depreciation and amortization


213,397


208,177

Stock-based compensation


27,816


35,893

Write-down of inventory


20,665


6,586

Deferred income taxes and other long-term taxes


(94,217)


(4,066)

Litigation expense


358,496


—

Settlement of New Markets Tax Credit transaction


(2,786)


—

Asset impairments


1,171


150

Other


3,384


3,534

Changes in operating assets and liabilities


(60,942)


(83,943)

Net cash flows from operating activities


399,865


547,891

Cash flows from (used by) investing activities:





Capital expenditures


(293,904)


(242,803)

Proceeds from government assistance related to property, plant and equipment


25,000


—

Proceeds from the sale of property, plant and equipment


5,439


—

Other


844


1,856

Net cash flows used by investing activities


(262,621)


(240,947)

Cash flows from (used by) financing activities:





Proceeds from issuance of long-term debt, net


147,724


—

Repayments of long-term debt


(30,403)


(27,484)

Debt issuance costs


(606)


—

Proceeds from accounts receivable facilities


29,758


142,015

Repayments under accounts receivable facilities


(29,758)


(122,284)

Treasury stock acquired


(148,854)


(128,164)

Tax withholdings related to share settlements, net of purchase plans


(9,551)


(8,563)

Dividends


(61,300)


(58,189)

Contribution from non-controlling interest


12


7

Net cash flows used by financing activities


(102,978)


(202,662)

Effect of exchange rate changes on cash


1,307


511

Increase in cash, restricted cash, and cash equivalents


35,573


104,793

Cash, restricted cash and cash equivalents at beginning of period


859,555


595,717

Cash, restricted cash and cash equivalents at end of period


$             895,128


$             700,510






Supplemental information:





Cash paid for income taxes


$               95,976


$             131,229

Cash paid for interest


37,190


35,604






Cash and cash equivalents


$             892,998


$             698,338

Restricted cash


2,130


2,172

Total cash, restricted cash and cash equivalents


$             895,128


$             700,510

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, 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 transactions" 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 Internal Revenue Service. The adjustment "Litigation expense" represents a provision recorded in the three months ended November 30, 2024 related to the judgment in the Pacific Steel Group litigation and, with respect to subsequent periods, interest expense on the judgment amount.

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 (loss) to adjusted EBITDA and core EBITDA is provided below:

Three Months Ended


Nine Months Ended

(in thousands)


5/31/2025


2/28/2025


11/30/2024


8/31/2024


5/31/2024


5/31/2025


5/31/2024

Net earnings (loss)


$    83,126


$    25,473


$              (175,718)


$  103,931


$  119,440


$   (67,119)


$  381,560

Interest expense


10,864


11,167


11,322


12,142


12,117


33,353


35,751

Income tax expense (benefit)


26,386


10,627


(55,582)


29,819


40,867


(18,569)


120,361

Depreciation and amortization


72,376


70,584


70,437


72,190


70,692


213,397


208,177

Asset impairments


785


386


—


6,558


146


1,171


150

Adjusted EBITDA


193,537


118,237


(149,541)


224,640


243,262


162,233


745,999

Non-cash equity compensation


9,546


8,038


10,232


9,173


12,846


27,816


35,893

Settlement of New Markets Tax Credit transactions


(2,786)


—


—


(6,748)


—


(2,786)


—

Litigation expense


3,776


4,720


350,000


—


—


358,496


—

Core EBITDA


$  204,073


$  130,995


$  210,691


$  227,065


$  256,108


$   545,759


$  781,892
















Net sales


$  2,019,984


$  1,754,376


$  1,909,602


$  1,996,149


$  2,078,485


$  5,683,962


$  5,929,823

Core EBITDA margin


10.1 %


7.5 %


11.0 %


11.4 %


12.3 %


9.6 %


13.2 %

A reconciliation of net earnings (loss) to adjusted earnings is provided below:

Three Months Ended


Nine Months Ended

(in thousands, except per share data)


5/31/2025


2/28/2025


11/30/2024


8/31/2024


5/31/2024


5/31/2025


5/31/2024

Net earnings (loss)


$    83,126


$    25,473


$ (175,718)


$  103,931


$  119,440


$  (67,119)


$  381,560

Asset impairments


785


386


—


6,558


146


1,171


150

Settlement of New Markets Tax Credit transactions


(2,786)


—


—


(6,748)


—


(2,786)


—

Litigation expense


3,776


4,720


350,000


—


—


358,496


—

Total adjustments (pre-tax)


$      1,775


$      5,106


$  350,000


$       (190)


$         146


$  356,881


$         150

Related tax effects on adjustments


(505)


(1,237)


(85,750)


40


(31)


(87,492)


(32)

Adjusted earnings


$    84,396


$    29,342


$    88,532


$  103,781


$  119,555


$  202,270


$  381,678

Net earnings (loss) per diluted share


$        0.73


$        0.22


$       (1.54)


$        0.90


$        1.02


$      (0.59)


$        3.25

Adjusted earnings per diluted share


$        0.74


$        0.26


$         0.78


$        0.90


$        1.02


$        1.78


$        3.25

 

Cision View original content:https://www.prnewswire.com/news-releases/cmc-reports-third-quarter-fiscal-2025-results-302487944.html

SOURCE Commercial Metals Company