Commercial Metals Company (NYSE:CMC) Q3 2023 Earnings Conference Call June 22, 2023 11:00 AM ET Company Participants Barbara Smith - Chairman of the Board and Chief Executive Officer Peter Matt - President Paul Lawrence - Senior Vice President and Chief Financial Officer Conference Call Participants Tristan Gresser - BNP Paribas Exane Timna Tanners - Wolfe Research Lawson Winder - Bank of America Emily Chieng - Goldman Sachs Alex Hacking - Citigroup Operator Hello, and welcome, everyone, to the Third Qua ...

Financial Performance - Net sales for the three months ended May 31, 2023, were $2,344,989 thousand, a decrease of 6.8% compared to $2,515,727 thousand for the same period in 2022[173]. - Net earnings for the nine months ended May 31, 2023, were $675,594 thousand, down 27.3% from $928,632 thousand for the same period in 2022[173]. - Diluted earnings per share for the three months ended May 31, 2023, were $1.98, a decrease of 22.1% compared to $2.54 for the same period in 2022[173]. - For the three and nine months ended May 31, 2023, the company achieved net earnings of $234.0 million and $675.6 million, respectively, compared to $312.4 million and $928.6 million in the corresponding periods, reflecting a decrease in earnings due to compression in steel products metal margins in Europe[200]. - Adjusted EBITDA for the nine months ended May 31, 2023, was $1,073,501 thousand, a decrease of 20% from $1,343,421 thousand for the same period in 2022[182]. - Adjusted EBITDA for the three and nine months ended May 31, 2023, was $402.2 million and $1.1 billion, respectively, compared to $379.4 million and $1.2 billion in the corresponding periods, with significant expansion in downstream products margin over scrap[204]. - Adjusted EBITDA decreased by $111.4 million, or 92%, for the three months ended May 31, 2023, and by $194.9 million, or 69%, for the nine months ended May 31, 2023, compared to the corresponding periods[235]. Acquisitions and Investments - The company completed the acquisition of Kodiak, a metals recycling facility, on November 14, 2022, and Tendon Systems, LLC, on March 17, 2023, enhancing its operational capabilities in North America[162][163]. - The acquisition of Tensar for approximately $550 million was completed on April 25, 2022, expanding the company's product offerings in ground stabilization and soil reinforcement[186]. - The acquired Tensar operations contributed $12.5 million and $49.4 million in incremental net sales during the three and nine months ended May 31, 2023, respectively[206]. - The acquired Tensar operations contributed an incremental $32.1 million and $108.2 million of net sales during the three and nine months ended May 31, 2023, respectively[232]. - The company plans to commission a new micro mill in Berkeley County, West Virginia, by late calendar 2025, enhancing steel production capabilities[191]. Sales and Market Conditions - The Europe segment experienced a decrease in net sales of $131.3 million, or 27%, and $93.9 million, or 8%, during the three and nine months ended May 31, 2023, primarily due to a 22% and 14% decrease in steel products average selling prices per ton[206]. - Net sales from external customers were $6,506,416 thousand for the nine months ended May 31, 2023, compared to $6,590,305 thousand for the same period in 2022[173]. - Net sales decreased by $170.7 million, or 7%, for the three months ended May 31, 2023, compared to the corresponding period, while remaining relatively flat for the nine months ended May 31, 2023[227]. Expenses and Liabilities - Selling, general and administrative expenses increased by $23.4 million and $78.4 million during the three and nine months ended May 31, 2023, respectively[228]. - Total accrued environmental liabilities were $5.2 million as of May 31, 2023, slightly down from $5.3 million at August 31, 2022[180]. - The company reported a decrease in interest expense by $4.6 million for both the three and nine months ended May 31, 2023, compared to the corresponding periods[175]. Cash Flow and Financing - Net cash flows from operating activities were $934.7 million for the nine months ended May 31, 2023, compared to $241.7 million for the same period in 2022[241]. - Net cash flows used by investing activities were $605.2 million for the nine months ended May 31, 2023, compared to $528.7 million for the same period in 2022[242]. - Net cash flows used by financing activities increased by $861.3 million to $537.0 million for the nine months ended May 31, 2023, compared to net cash flows from financing activities of $324.3 million for the same period in 2022[243]. - The company made net repayments of long-term debt amounting to $380.7 million during the nine months ended May 31, 2023, compared to net proceeds of $420.7 million from long-term debt issuance in the same period of 2022[243]. Future Outlook and Capital Expenditures - The company estimates its 2023 capital spending will range from $575 million to $600 million, subject to change based on current and expected results[213]. - The company anticipates that current cash balances and cash flows from operations will be sufficient to maintain operations and meet liquidity needs for at least the next twelve months[239]. - The company anticipates potential synergies and organic growth from acquisitions and strategic investments, although actual results may vary materially from expectations[247]. Other Financial Metrics - The effective income tax rates for the three and nine months ended May 31, 2023, were 24.5% and 23.6%, respectively, compared to 22.9% and 21.1% in the corresponding periods, with the increase primarily due to a non-recurring tax benefit in 2022[202]. - The cost of energy increased by $57 per ton during both the three and nine months ended May 31, 2023, compared to the corresponding periods[235]. - Goodwill increased to $352.3 million as of May 31, 2023, from $259.2 million on September 1, 2022, reflecting acquisitions and foreign currency translation adjustments[259]. - Total commodity contract commitments increased by $245.8 million, or 120%, compared to August 31, 2022, primarily due to a $254.4 million increase in electricity commodity commitments[250]. - Undiscounted purchase obligations due in the twelve months following May 31, 2023, were approximately $810 million, with 24% allocated for consumable production inputs and 21% for capital expenditures[252]. - Operating lease obligations for the twelve months following May 31, 2023, were approximately $38.8 million, with $133.6 million due thereafter[245]. - Finance lease obligations for the twelve months following May 31, 2023, were approximately $27.9 million, with $61.5 million due thereafter[245]. - The company had committed $21.9 million under stand-by letters of credit as of May 31, 2023[253]. - The average floating rate (PLN) as of May 31, 2023, was 770.93, compared to 717.22 on August 31, 2022[261].

Commercial Metals Company (NYSE:CMC) Q2 2023 Earnings Conference Call March 23, 2023 11:00 AM ET Company Participants Barbara Smith - Chairman, President and Chief Executive Officer Paul Lawrence - Senior Vice President and Chief Financial Officer Conference Call Participants Emily Chieng - Goldman Sachs Group, Inc. Timna Tanners - Wolfe Research, LLC Tristan Gresser - BNP Paribas Exane Philip Gibbs - KeyBanc Capital Markets Inc. Lawson Winder - Bank of America Merrill Lynch Alex Hacking - Citigroup Operato ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4304 ___________________________________ COMMERCIAL METALS COMPANY (Exact Name of Registrant as Specified in Its Charter) Delaware 75-0725338 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employe ...

Commercial Metals Company (NYSE:CMC) Q1 2023 Earnings Conference Call January 9, 2023 11:00 AM ET Company Participants Barbara Smith - Chairman, President and Chief Executive Officer Paul Lawrence - Senior Vice President and Chief Financial Officer Conference Call Participants Emily Chieng - Goldman Sachs Group, Inc. Timna Tanners - Wolfe Research, LLC Lawson Winder - Bank of America Merrill Lynch Philip Gibbs - KeyBanc Capital Markets Inc. Tristan Gresser - BNP Paribas Exane Operator Hello, and welcome, ev ...

COMMERCIAL METALS COMPANY AND SUBSIDIARIES TABLE OF CONTENTS Delaware 75-0725338 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number) Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ Item 1. Financial Statements 3 Item 3. Defaults Upon Senior Securities 32 Item 5. Other Information 32 Signature 34 Table of Contents ITEM 1. FINANCIAL STATEMENTS Average diluted shares outstanding 118,92 ...

Commercial Metals Company (NYSE:CMC) Q4 2022 Earnings Conference Call October 13, 2022 11:00 AM ET Company Participants Barbara Smith - Chairman, President & CEO Paul Lawrence - SVP & CFO Conference Call Participants Emily Chieng - Goldman Sachs Timna Tanners - Wolfe Research Seth Rosenfeld - BNP Paribas Exane Philip Gibbs - KeyBanc Capital Markets Operator Hello, and welcome everyone to the Fourth Quarter Fiscal 2022 Earnings Call for Commercial Metals Company. Today’s materials, including the press releas ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Commercial Metals Company (CMC) is a vertically integrated manufacturer, recycler, and fabricator of steel and metal products, recently expanding into ground and soil stabilization solutions with the acquisition of Tensar [Business Developments](index=4&type=section&id=Business%20Developments) The company is focused on strategic growth through the acquisition of Tensar and significant capital investments in new, technologically advanced micro mills in the U.S. and an expanded rolling line in Poland to enhance production capabilities and market reach - Completed the acquisition of Tensar for approximately **$550 million** on April 25, 2022, to broaden its product offerings into ground stabilization and soil reinforcement solutions[14](index=14&type=chunk) - Announced plans for a fourth micro mill to serve the Northeast, Mid-Atlantic, and Midwestern U.S. markets, with construction expected to take about two years[16](index=16&type=chunk) - Construction of a third micro mill in Mesa, Arizona, is underway and expected to be commissioned in calendar 2023, capable of producing merchant bar quality products through a continuous process[18](index=18&type=chunk) [Segments](index=5&type=section&id=Segments) The company operates through two reportable segments, North America and Europe, both vertically integrated networks of recycling, steel mill, and fabrication operations, with North America being the larger segment and both including newly acquired Tensar operations - The North America segment's downstream products backlog, representing unfulfilled orders, increased to **$1.9 billion** at August 31, 2022, from **$1.5 billion** at August 31, 2021[29](index=29&type=chunk) - The Europe segment's mini mill in Poland is a significant manufacturer of steel products in Central Europe, serving customers primarily in Poland but also exporting to neighboring countries like Germany and the Czech Republic[34](index=34&type=chunk) [Competition](index=8&type=section&id=Competition) CMC competes with a range of domestic and international steel producers, facing challenges from global overcapacity and steel imports, but believes its vertically integrated model, strategic geographic footprint, and sustainable EAF technology provide significant competitive advantages - The company's vertically integrated platform, with recycling and fabrication operations supporting its steel mills, provides a secure supply of low-cost raw materials and a consistent source of demand[42](index=42&type=chunk) - CMC's use of EAF technology is more energy-efficient and environmentally friendly than traditional blast furnaces, with approximately **98%** of raw materials in its finished steel being recycled content in 2022[44](index=44&type=chunk)[46](index=46&type=chunk) [Employees and Workforce Culture](index=10&type=section&id=Employees%20and%20Workforce%20Culture) As of August 31, 2022, the company employed 12,483 people across its segments, emphasizing a culture of safety, ethics, and inclusion, achieving a total recordable incident rate (TRIR) of 1.5, which is below the industry average Employee Headcount by Segment (as of Aug 31, 2022) | Segment | Number of Employees | | :--- | :--- | | North America | 8,950 | | Europe | 3,157 | | Corporate and Other | 376 | | **Total** | **12,483** | - The company's commitment to safety resulted in a total recordable incident rate (TRIR) of **1.5** in 2022, below the industry average of **2.1** for iron and steel mills in 2020[56](index=56&type=chunk) [Risk Factors](index=13&type=page&id=Item%201A.%20Risk%20Factors) The company faces material risks related to its business, industry, and the regulatory environment, including volatility in raw material and energy prices, economic downturns, competition, IT security threats, global overcapacity, and significant environmental compliance costs - Business operations are vulnerable to significant price fluctuations and limited availability of scrap metal and other inputs, which can adversely affect profitability[69](index=69&type=chunk)[70](index=70&type=chunk) - The industry is exposed to global overcapacity, particularly from foreign producers, and the startup of new domestic capacity, which could lower steel prices and negatively impact sales and margins[139](index=139&type=chunk)[140](index=140&type=chunk) - Compliance with and changes to environmental laws, including those related to climate change and hazardous waste (like EAF dust), could result in substantially increased capital and operating costs[149](index=149&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company's principal properties include numerous recycling facilities, steel mills, and fabrication facilities across North America and Poland, with a detailed table listing their location, size, and production capacity, which are considered adequate for current and future operational needs Annual Production Capacity by Operation | Segment and Operation | Capacity (Millions of Tons) | | :--- | :--- | | **North America** | | | Recycling facilities | 4.7 | | Steel mills | 5.4 | | Fabrication facilities | 2.3 | | **Europe** | | | Recycling facilities | 0.6 | | Steel mini mill | 1.7 | | Fabrication facilities | 0.5 | [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal and regulatory proceedings in the normal course of business, notably being named a Potentially Responsible Party (PRP) under CERCLA at nine locations where it sold scrap metal for recycling, though management believes adequate provisions have been made and does not expect a material adverse effect - The company has been named a Potentially Responsible Party (PRP) at nine federal and state Superfund sites related to the sale of scrap metal to third-party manufacturers[176](index=176&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=page&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) CMC's common stock trades on the NYSE under the symbol 'CMC', with the company increasing its quarterly dividend to **$0.14** per share in 2022 and subsequently to **$0.16** per share, and repurchasing nearly **3 million** shares during the fourth quarter of fiscal 2022 under a **$350 million** program - Quarterly dividends were increased from **$0.12** per share in 2021 to **$0.14** per share in 2022, with a further increase to **$0.16** per share declared on October 11, 2022[181](index=181&type=chunk)[183](index=183&type=chunk) Share Repurchases (Quarter Ended Aug 31, 2022) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jun 2022 | 977,309 | $36.40 | | Jul 2022 | 1,814,721 | $34.41 | | Aug 2022 | 203,211 | $40.68 | | **Total** | **2,995,241** | - | - As of August 31, 2022, approximately **$188.1 million** remained available for repurchase under the authorized program[186](index=186&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 saw a significant increase in financial performance, with net sales rising **32%** to **$8.9 billion** and net earnings growing **195%** to **$1.2 billion**, driven by higher average selling prices, strong margin expansion, and a **$273.3 million** gain from an asset sale, while maintaining strong liquidity and investing in strategic growth [Results of Operations Summary](index=29&type=section&id=Results%20of%20Operations%20Summary) For the fiscal year 2022, net sales increased by **32%** to **$8.9 billion**, and net earnings surged **195%** to **$1.2 billion** compared to 2021, primarily due to significant margin expansion as selling price increases outpaced rising input costs, supplemented by a **$273.3 million** gain on the sale of the Rancho Cucamonga facilities Financial Highlights (Year Ended August 31) | (in thousands, except per share data) | 2022 | 2021 | | :--- | :--- | :--- | | Net sales | $8,913,481 | $6,729,760 | | Net earnings | $1,217,262 | $412,865 | | Diluted earnings per share | $9.95 | $3.38 | - The increase in net earnings included a **$273.3 million** gain on the sale of the Rancho Cucamonga facilities[204](index=204&type=chunk) [Segments Performance](index=30&type=section&id=Segments%20Performance) Both segments delivered strong growth in fiscal 2022, with the North America segment's adjusted EBITDA more than doubling to **$1.55 billion** and the Europe segment's adjusted EBITDA growing **133%** to **$346.1 million**, driven by significant increases in steel products metal margin amid strong market demand and supply disruptions North America Segment Performance (2022 vs 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net sales (in thousands) | $7,298,632 | $5,670,976 | | Adjusted EBITDA (in thousands) | $1,553,858 | $746,594 | | Steel products metal margin per ton | $629 | $397 | Europe Segment Performance (2022 vs 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net sales (in thousands) | $1,621,642 | $1,049,059 | | Adjusted EBITDA (in thousands) | $346,051 | $148,258 | | Steel products metal margin per ton | $433 | $255 | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity remains strong, with cash and cash equivalents of **$672.6 million** and increased net cash from operating activities to **$700.3 million** in 2022, while projecting capital spending between **$450 million** and **$500 million** for fiscal 2023 - Net cash flows from operating activities increased by **$471.8 million** year-over-year, reaching **$700.3 million** in 2022[225](index=225&type=chunk) - Net cash used in investing activities was **$684.7 million**, primarily due to the **$550 million** Tensar acquisition and **$265.8 million** in increased capital expenditures, partially offset by **$313.0 million** in proceeds from an asset sale[226](index=226&type=chunk) - Capital spending for fiscal 2023 is estimated to be in the range of **$450 million** to **$500 million**[224](index=224&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from fluctuations in foreign currency exchange rates, commodity prices, and energy prices, which it mitigates using various derivative instruments like foreign currency forward contracts and commodity futures for metals, natural gas, and electricity, not for speculative purposes - The company uses foreign currency exchange forward contracts to hedge trade commitments denominated in currencies other than the functional currency, primarily involving the Polish Zloty (PLN), U.S. Dollar (USD), and Euro (EUR)[274](index=274&type=chunk) - Metal commodity futures contracts for copper and aluminum, as well as energy derivatives for electricity and natural gas, are used to mitigate the risk of margin declines due to price volatility[277](index=277&type=chunk) [Financial Statements and Supplementary Data](index=43&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal year ended August 31, 2022, and the independent auditor's unqualified report from Deloitte & Touche LLP on both the financial statements and the effectiveness of internal controls over financial reporting, with key notes detailing the Tensar acquisition, segment performance, and debt arrangements [Consolidated Financial Statements](index=47&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position and results of operations, reporting net sales of **$8.91 billion**, net earnings of **$1.22 billion**, and diluted EPS of **$9.95** for fiscal year 2022, with total assets growing to **$6.24 billion** and total stockholders' equity increasing to **$3.29 billion** Consolidated Statement of Earnings Highlights (FY 2022) | (in thousands) | Amount | | :--- | :--- | | Net sales | $8,913,481 | | Cost of goods sold | $7,057,085 | | Earnings from continuing operations before income taxes | $1,515,147 | | Net earnings | $1,217,262 | Consolidated Balance Sheet Highlights (As of Aug 31, 2022) | (in thousands) | Amount | | :--- | :--- | | Total current assets | $3,441,468 | | Total assets | $6,237,027 | | Total current liabilities | $1,356,987 | | Total liabilities | $2,950,598 | | Total stockholders' equity | $3,286,429 | [Notes to Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the financial statements, including the accounting for the **$550 million** Tensar acquisition, the **$313 million** sale of the Rancho Cucamonga facilities, a breakdown of segment performance showing strong growth, and details on the company's **$1.11 billion** in long-term debt - Note 2: The acquisition of Tensar was completed on April 25, 2022, for a net cash purchase price of approximately **$550 million**, resulting in **$186.8 million** of goodwill and **$260.5 million** of intangible assets[354](index=354&type=chunk)[359](index=359&type=chunk)[364](index=364&type=chunk) - Note 9: In fiscal 2022, the company redeemed **$300.0 million** of 5.375% Senior Notes and issued **$600.0 million** of new senior notes with lower interest rates (4.125% and 4.375%)[397](index=397&type=chunk)[398](index=398&type=chunk) - Note 16: Under a new **$350.0 million** share repurchase program, the company repurchased **4,496,628** shares for **$161.9 million** during fiscal 2022, with **$188.1 million** remaining authorized for future repurchases[479](index=479&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of August 31, 2022, with the assessment of internal control over financial reporting excluding the recently acquired Tensar, as permitted by SEC guidance, and the independent auditor issuing an unqualified opinion - The company's management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of August 31, 2022[497](index=497&type=chunk) - The assessment of internal controls excluded the newly acquired Tensar, which represented **10%** of total assets as of the fiscal year-end[498](index=498&type=chunk)[502](index=502&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, and Related Matters](index=88&type=section&id=Items%2010-14) This section incorporates by reference information from the company's forthcoming 2023 definitive proxy statement, covering details regarding directors and executive officers, executive compensation, security ownership, certain relationships and related transactions, and principal accountant fees and services - Information required for Items 10 through 14 is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders[508](index=508&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=89&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Annual Report, including the financial statements, the financial statement schedule for Valuation and Qualifying Accounts, and a comprehensive list of exhibits such as merger agreements, corporate governance documents, debt indentures, and material contracts - The report includes the financial statements from Item 8 and the financial statement schedule 'Schedule II — Valuation and Qualifying Accounts'[515](index=515&type=chunk)[516](index=516&type=chunk)[517](index=517&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ___________________________________ FORM 10-Q ___________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4304 ___________________________________ COMMERCIAL METALS COMPANY (Exa ...

Commercial Metals Company (NYSE:CMC) Q3 2022 Earnings Conference Call June 16, 2022 11:00 AM ET Company Participants Barbara Smith - Chairman, President and CEO Paul Lawrence - SVP and CFO Conference Call Participants Emily Chieng - Goldman Sachs David Gagliano - BMO Capital Markets Seth Rosenfeld - BNP Paribas Exane Phil Gibbs - KeyBanc Capital Markets Operator Hello, and welcome everyone to the Third Quarter Fiscal 2022 Earnings Call for Commercial Metals Company. Today’s materials, including the press re ...