CMC(US:CMC)2026-01-08 17:20Financial Performance - Net sales for the three months ended November 30, 2025, increased by $210.7 million, or 11%, to $2,120.3 million compared to the corresponding period in 2024[121] - Net earnings for the same period were $177.3 million, a significant improvement from a net loss of $175.7 million in the prior year[121] - Diluted earnings per share for the current period were $1.58, compared to a loss of $1.54 per share in the previous year[121] - Net earnings for the three months ended November 30, 2025, increased year-over-year primarily due to a litigation-related expense of approximately $265.0 million recognized in the prior period and improved steel products metal margins[122] Acquisitions and Investments - The company completed the acquisition of Concrete Pipe and Precast, LLC on December 1, 2025, enhancing its precast concrete solutions portfolio[100] - The acquisition of Foley Products Company, LLC was finalized on December 15, 2025, further strengthening the company's position in the precast concrete market[101] - The company anticipates 2026 capital spending of approximately $625 million, primarily for the construction of facilities in West Virginia[143] Debt and Financing - The company issued $1.0 billion of 5.750% senior unsecured notes due November 2033 and $1.0 billion of 6.000% senior unsecured notes due December 2035, with aggregate issuance costs of approximately $5.5 million[99] - The company increased its revolving credit facility borrowing capacity from $600.0 million to $1.0 billion, extending the maturity date to December 17, 2030[103] - Interest expense increased by $13.5 million due to a higher borrowing base and committed financing fees of $11.6 million related to the Bridge Facility[124] - The company received net proceeds of $2.0 billion from the issuance of the 2033 Notes and 2035 Notes, with aggregate issuance costs of approximately $5.5 million[152] Operational Performance - Selling, General and Administrative (SG&A) expenses rose by $17.8 million, driven by $13.4 million in transaction expenses related to the CP&P and Foley Acquisitions[123] - Net sales to external customers in the North America Steel Group segment increased by $142.4 million, or 9%, driven by a 16% increase in the average selling price per ton of steel products[128] - Adjusted EBITDA for the North America Steel Group increased by $107.7 million, or 58%, primarily due to a 27% year-over-year increase in steel products metal margin per ton[129] - Net sales in the Construction Solutions Group segment increased by $28.9 million, or 17%, primarily due to increased demand from the Tensar division and CMC Construction Services[130] - Net sales to external customers in the Europe Steel Group segment increased by $38.2 million, or 18%, partly due to a 16% increase in tons shipped[132] - Adjusted EBITDA in the Europe Steel Group decreased by $14.9 million, or 58%, primarily due to changes in government assistance payments related to rising carbon emissions costs[133] - Corporate and Other adjusted EBITDA loss decreased by $330.4 million, or 86%, due to a $350.0 million contingent litigation-related loss recognized in the prior period[134] Cash Flow and Commitments - For the three months ended November 30, 2025, cash from operating activities decreased by $112.5 million due to a $36.3 million increase in cash used by accounts payable and a $57.0 million decrease in cash provided by accounts receivable[150] - Capital expenditures increased by $7.3 million year-over-year, primarily due to the construction of the fourth micro mill[151] - Material cash commitments primarily consist of long-term debt obligations, leases, and acquisition-related commitments, with no significant changes since the 2025 Form 10-K[154] - The company maintains stand-by letters of credit totaling $46.5 million, with $1.0 million reducing availability under the Revolver[155] Risks and Legislative Changes - The company is subject to risks from macroeconomic conditions, including potential impacts from tariffs on steel imports, which could affect pricing and profitability[107][108] - Recent tax legislation updates include the expansion of bonus depreciation and accelerated expensing of research and development costs, which have been incorporated into the company's fiscal 2026 tax provision[111] Forward-Looking Statements - Forward-looking statements indicate expectations regarding the benefits of acquisitions, economic conditions, and operational capabilities, with no assurance that these expectations will be met[157]