0000022444FALSE00000224442024-01-082024-01-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 8, 2024
Commercial Metals Company
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-430475-0725338
(Commission File Number)
(IRS Employer Identification No.)
6565 N. MacArthur Blvd.
Irving, Texas
75039
(Address of Principal Executive Offices)(Zip Code)
(214) 689-4300
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par valueCMCNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02 Results of Operations and Financial Condition.

On January 8, 2024, Commercial Metals Company (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal year 2024. A copy of the press release is attached hereto as Exhibit 99.1. The press release is incorporated by reference into this Item 2.02, and the foregoing description of the press release is qualified in its entirety by reference to Exhibit 99.1.

The information in this Item 2.02 of Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 7.01 Regulation FD Disclosure.

On January 8, 2024, the Company made available on its website a financial presentation regarding its financial results for the first quarter of fiscal year 2024. A copy of the financial presentation is attached hereto as Exhibit 99.2. The financial presentation is incorporated by reference into this Item 7.01, and the foregoing description of the financial presentation is qualified in its entirety by reference to Exhibit 99.2.

The information in this Item 7.01 of Form 8-K, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities under that section and is not incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Item 9.01 Financial Statements and Exhibits.
(d)   Exhibits
The following exhibits are being furnished as part of this Current Report on Form 8-K:
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
COMMERCIAL METALS COMPANY
  
Date: January 8, 2024 By: /s/ Paul J. Lawrence
 Name: Paul J. Lawrence
  Title: Senior Vice President and Chief Financial Officer
 






Exhibit No. 99.1
News Release cmc-logo_rgbxprimaryx300px.jpg


CMC REPORTS FIRST QUARTER FISCAL 2024 RESULTS

•First quarter net earnings of $176.3 million, or $1.49 per diluted share
•Consolidated core EBITDA of $325.3 million; core EBITDA margin of 16.2%
•Generated cash flow from operating activities of $261.1 million and free cash flow of $194.1 million
•Continued healthy demand levels for North America Steel Group as finished steel volumes increased by 1.1% on a year-over-year basis
•Continued progress on strategic growth initiatives: Arizona 2 production increasing steadily and construction well underway at future Steel West Virginia site
•Segment reporting realigned to reflect the manner in which the business is managed and support strategic priorities and execution


Irving, TX - January 8, 2024 - Commercial Metals Company (NYSE: CMC) today announced financial results for its fiscal first quarter ended November 30, 2023. Net earnings were $176.3 million, or $1.49 per diluted share, on net sales of $2.0 billion, compared to prior year period net earnings of $261.8 million, or $2.20 per diluted share, on net sales of $2.2 billion.

During the first quarter of fiscal 2024, the Company recorded a net after-tax charge of $16.4 million related to commissioning efforts at the Arizona 2 micro mill. Excluding this item, first quarter adjusted earnings were $192.7 million, or $1.63 per diluted share, compared to adjusted earnings of $266.2 million, or $2.24 per diluted share, in the prior year period. "Adjusted EBITDA," "core EBITDA," "core EBITDA margin," "free cash flow," "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.

Peter Matt, President and Chief Executive Officer, said, “Our business again generated very strong financial results during the first quarter, with core EBITDA, core EBITDA margin, and cash flows continuing at historically strong levels. Performance in our North America Steel Group was supported by sustained healthy construction activity and near-record margins on our downstream products. While steel product margins experienced compression in the quarter, market developments indicate this trend should halt or reverse in the coming months. Our Europe Steel Group performed well against a market environment challenged by weaker demand and lower product margins. Encouragingly, selling prices and metal margins on long products began to improve midway through the quarter, and several green shoots have emerged that could bolster the Polish market in the quarters ahead."



(CMC First Quarter Fiscal 2024 - 2)

Mr. Matt added, “During the first quarter, we continued to invest and build for the future. Following its successful summer start-up, production levels at our new Arizona 2 micro mill improved throughout the quarter, and we expect these to steadily increase in the months ahead. Site improvements for our Steel West Virginia project should be completed shortly, clearing the way to begin pouring foundations. We have successfully integrated a number of our recent acquisitions which extend our operational and commercial capabilities and further our strategic position. All of these initiatives broaden our exposure to the favorable structural trends powering domestic construction, and are expected to drive strong future growth in earnings, cash flow, and shareholder value.”

“We recently changed our organizational structure and segment reporting to support our strategic priorities of driving higher through-the-cycle margins and growth. The decision to break out the Emerging Businesses Group was motivated by the desire to provide additional attention to this unique portfolio of solutions which we believe have the potential to maintain higher, more stable margins and an elevated rate of growth relative to our steel business," Matt concluded.

The Company's balance sheet and liquidity position remained strong. As of November 30, 2023, cash and cash equivalents totaled $704.6 million, with available liquidity in excess of $1.5 billion. During the quarter, CMC repurchased 621,643 shares of common stock valued at $28.4 million in the aggregate. As of November 30, 2023, $58.3 million remained available under the current share repurchase authorization.

On January 4, 2024, the board of directors declared a quarterly dividend of $0.16 per share of CMC common stock payable to stockholders of record on January 18, 2024. The dividend to be paid on February 1, 2024, marks the 237th consecutive quarterly payment by the Company.

Business Segments - Fiscal First Quarter 2024 Review
Demand for CMC's finished steel products in North America continued to be healthy during the quarter. Robust construction activity supported a 3% year-over-year increase in total North America Steel Group rebar shipments, a measure that includes rebar sold directly from mills as well as fabricated product shipped from CMC’s downstream facilities. The construction pipeline remained historically strong with high volumes of potential projects. However, lower new contract awards have driven a year-over-year reduction in the volume and value of CMC’s downstream backlog from the peak experienced last year. Demand from industrial end markets, which is important for merchant products, was mixed, with certain applications experiencing slower activity compared to the prior year quarter.

Adjusted EBITDA for the North America Steel Group decreased to $266.8 million in the first quarter of fiscal 2024 from $349.8 million in the prior year period, driven by lower margins over scrap costs on steel products and higher costs related to the operational start-up of the Company's Arizona 2 micro mill. These factors more than


(CMC First Quarter Fiscal 2024 - 3)

offset benefits from increased steel product shipments and CMC’s ongoing cost reduction efforts. The adjusted EBITDA margin for the North America Steel Group of 16.8% compares to 21.0% in the prior year period.

North America Steel Group shipment volumes of finished steel, which include steel products and downstream products, increased 1.1% year-over-year. The average selling price for steel products decreased $128 per ton compared to the first quarter of fiscal 2023, while the cost of scrap utilized increased $18 per ton, resulting in a year-over-year decrease in steel products margin over scrap of $146 per ton. The average selling price for downstream products declined by $10 per ton from the prior year period.

Europe end market conditions remained challenging during the quarter, as Polish construction activity decelerated and industrial production across Central Europe remained muted. The Europe Steel Group reported adjusted EBITDA of $38.9 million, compared to adjusted EBITDA of $61.2 million in the prior year period. First quarter 2024 results include two energy cost rebates totaling approximately $66 million. Of these rebates, $27.7 million is related to an annual CO2 credit under a government program that extends to 2030, and the remaining $38.6 million is structured as a reimbursement by the Polish government for elevated energy costs incurred during the European energy crisis. Adjusted EBITDA for the prior year period included $9.5 million related to the annual CO2 program. The adjusted EBITDA margin for the Europe Steel Group of 17.3% compares to 15.8% in the prior year period.

Against this difficult market backdrop, Europe Steel Group’s average selling price decreased $159 per ton from the first quarter of the prior year, while scrap costs decreased by only $1 per ton, leading to metal margin compression. The decline in profitability, excluding energy rebates, was also impacted by a 27% decrease in shipment volumes compared to the prior year period, which reduced fixed cost leverage.

Emerging Businesses Group first quarter net sales of $177.2 million increased by 3.9% from the prior year period, driven largely by the addition of CMC Anchoring Systems. Demand conditions were generally positive during the quarter, with relative strength in North America and a weaker environment elsewhere. Construction activity in the United States drove solid demand for geogrid solutions, construction services, CMC Anchoring Systems, and performance reinforcing steels.

Adjusted EBITDA for the Emerging Businesses Group of $30.9 million during the first quarter was relatively flat compared to the prior year period. The adjusted EBITDA margin of 17.4% represented a decline of 100 basis points, as the positive impact from the addition of CMC Anchoring Systems and the benefit of improved adoption rates for proprietary geogrid solutions in North America were offset by weather delays in the Central U.S. and lower construction activity in Europe and the Middle East.



(CMC First Quarter Fiscal 2024 - 4)

Outlook
Mr. Matt said, "Margins on steel products are likely to experience some further compression during the second quarter, however, recent price announcements should support an inflection and improved margins going forward. Downstream product margins should exhibit good sequential stability. Conditions in Europe are expected to remain challenging, but adjusted EBITDA excluding energy rebates should improve from the levels of the past two quarters. Financial results for our Emerging Businesses Group are anticipated to follow a typical seasonal pattern.”

Mr. Matt continued, "looking beyond the second quarter, we expect robust spring and summer construction activity driven by increased infrastructure investments, which should support an already strong demand backdrop in both the North America Steel Group and the Emerging Businesses Group. Regarding the Europe Steel Group, we expect that supply side adjustments and the impact of increasing levels of residential and infrastructure construction should drive sequential improvements in financial results beginning in the spring construction season."

Conference Call
CMC invites you to listen to a live broadcast of its first quarter fiscal 2024 conference call today, Monday, January 8, 2024, 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 construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission.



(CMC First Quarter Fiscal 2024 - 5)

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 organic 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 Emerging Businesses Group, share repurchases, legal proceedings, construction activity, international trade, the impact of the Russian invasion of Ukraine, 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 timeline for execution of our growth plan 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, 2023, 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 the Russian invasion of Ukraine 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 or environmental justice 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


(CMC First Quarter Fiscal 2024 - 6)

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; our ability to successfully execute leadership transitions; 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; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.


(CMC First Quarter Fiscal 2024 - 7)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
FINANCIAL & OPERATING STATISTICS (UNAUDITED)
 Three Months Ended
(in thousands, except per ton amounts)11/30/20238/31/20235/31/20232/28/202311/30/2022
North America Steel Group
Net sales from external customers$1,592,650 $1,717,979 $1,818,391 $1,503,774 $1,664,161 
Adjusted EBITDA266,820 336,843 367,561 274,240 349,787 
Adjusted EBITDA margin16.8%19.6%20.2%18.2%21.0%
External tons shipped
Raw materials374344409321316
Rebar522542539425461
Merchant bar and other230215249235243
Steel products752757788660704
Downstream products346387382315382
Average selling price per ton
Raw materials$783$838$833$868$824
Steel products8929329799851,020
Downstream products1,3891,4281,4521,4211,399
Cost of raw materials per ton$578$606$619$639$598
Cost of ferrous scrap utilized per ton$343$338$384$346$325
Steel products metal margin per ton$549$594$595$639$695
Europe Steel Group
Net sales from external customers$225,175$273,961$330,767$337,560$386,503
Adjusted EBITDA38,942(30,081)5,83711,46961,248
Adjusted EBITDA margin17.3%(11.0)%1.8%3.4%15.8%
External tons shipped
Rebar122151146183204
Merchant bar and other221238283253269
Steel products343389429436473
Average selling price per ton
Steel products$633$682$753$756$792
Cost of ferrous scrap utilized per ton$365$398$427$389$366
Steel products metal margin per ton$268$284$326$367$426
Emerging Businesses Group
Net sales from external customers$177,239$208,559$189,055$153,598$170,534
Adjusted EBITDA30,86242,61238,39526,55131,427
Adjusted EBITDA margin17.4%20.4%20.3%17.3%18.4%




(CMC First Quarter Fiscal 2024 - 8)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
BUSINESS SEGMENTS (UNAUDITED)
Three Months Ended
(in thousands)11/30/20238/31/20235/31/20232/28/202311/30/2022
Net sales from external customers
North America Steel Group$1,592,650 $1,717,979 $1,818,391 $1,503,774 $1,664,161 
Europe Steel Group225,175 273,961 330,767 337,560 386,503 
Emerging Businesses Group177,239 208,559 189,055 153,598 170,534 
Corporate and Other7,987 8,729 6,776 23,071 6,115 
Total net sales from external customers$2,003,051 $2,209,228 $2,344,989 $2,018,003 $2,227,313 
Adjusted EBITDA
North America Steel Group$266,820 $336,843 $367,561 $274,240 $349,787 
Europe Steel Group38,942 (30,081)5,837 11,469 61,248 
Emerging Businesses Group30,862 42,612 38,395 26,551 31,427 
Corporate and Other(30,987)(38,171)(37,715)(15,573)(39,726)
Total adjusted EBITDA$305,637 $311,203 $374,078 $296,687 $402,736 




(CMC First Quarter Fiscal 2024 - 9)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
 Three Months Ended November 30,
(in thousands, except share and per share data)20232022
Net sales$2,003,051 $2,227,313 
Costs and operating expenses:
Cost of goods sold1,604,068 1,719,414 
Selling, general and administrative expenses162,532 156,355 
Interest expense11,756 13,045 
Net costs and operating expenses1,778,356 1,888,814 
Earnings before income taxes224,695 338,499 
Income taxes48,422 76,725 
Net earnings$176,273 $261,774 
Earnings per share:
Basic$1.51 $2.23 
Diluted1.49 2.20 
Cash dividends per share$0.16 $0.16 
Average basic shares outstanding116,771,939 117,273,743 
Average diluted shares outstanding118,354,913 118,925,442 
 



(CMC First Quarter Fiscal 2024 - 10)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share data)November 30, 2023August 31, 2023
Assets
Current assets:
Cash and cash equivalents$704,603 $592,332 
Accounts receivable (less allowance for doubtful accounts of $4,408 and $4,135)
1,216,352 1,240,217 
Inventories, net1,028,686 1,035,582 
Prepaid and other current assets294,186 276,024 
Total current assets3,243,827 3,144,155 
Property, plant and equipment, net2,423,684 2,409,360 
Intangible assets, net252,299 259,161 
Goodwill382,688 385,821 
Other noncurrent assets392,671 440,597 
Total assets$6,695,169 $6,639,094 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$343,831 $364,390 
Accrued expenses and other payables409,126 438,811 
Current maturities of long-term debt and short-term borrowings33,998 40,513 
Total current liabilities786,955 843,714 
Deferred income taxes317,518 306,801 
Other noncurrent liabilities240,247 253,181 
Long-term debt1,120,472 1,114,284 
Total liabilities2,465,192 2,517,980 
Stockholders' equity:
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 116,708,224 and 116,515,427 shares
1,290 1,290 
Additional paid-in capital377,533 394,672 
Accumulated other comprehensive loss(24,738)(3,778)
Retained earnings4,254,787 4,097,262 
Less treasury stock, 12,352,440 and 12,545,237 shares at cost
(379,136)(368,573)
Stockholders' equity4,229,736 4,120,873 
Stockholders' equity attributable to non-controlling interests241 241 
Total stockholders' equity4,229,977 4,121,114 
Total liabilities and stockholders' equity$6,695,169 $6,639,094 





(CMC First Quarter Fiscal 2024 - 11)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Three Months Ended November 30,
(in thousands)20232022
Cash flows from (used by) operating activities:
Net earnings$176,273 $261,774 
Adjustments to reconcile net earnings to net cash flows from operating activities:
Depreciation and amortization69,186 51,183 
Deferred income taxes and other long-term taxes21,343 16,744 
Write-down of inventory10,655 4,527 
Stock-based compensation8,059 16,675 
Other1,102 1,440 
Changes in operating assets and liabilities, net of acquisitions(25,558)20,027 
Net cash flows from operating activities
261,060 372,370 
Cash flows from (used by) investing activities:
Capital expenditures(66,991)(133,052)
Acquisitions, net of cash acquired— (63,745)
Other518 1,247 
Net cash flows used by investing activities
(66,473)(195,550)
Cash flows from (used by) financing activities:
Repayments of long-term debt(9,276)(154,631)
Debt issuance costs— (1,800)
Debt extinguishment costs— (69)
Proceeds from accounts receivable facilities9,421 49 
Repayments under accounts receivable facilities(17,471)(25,914)
Treasury stock acquired(28,408)(49,149)
Tax withholdings related to share settlements, net of purchase plans(19,535)(23,513)
Dividends(18,748)(18,787)
Net cash flows used by financing activities
(84,017)(273,814)
Effect of exchange rate changes on cash819 5,139 
Increase (decrease) in cash, restricted cash, and cash equivalents
111,389 (91,855)
Cash, restricted cash and cash equivalents at beginning of period595,717 679,243 
Cash, restricted cash and cash equivalents at end of period$707,106 $587,388 
Supplemental information:
Cash paid for income taxes$1,398 $15,694 
Cash paid for interest10,888 22,201 
Noncash activities:
Liabilities related to additions of property, plant and equipment$17,828 $47,429 
Cash and cash equivalents$704,603 $582,069 
Restricted cash2,503 5,319 
Total cash, restricted cash and cash equivalents$707,106 $587,388 


(CMC First Quarter Fiscal 2024 - 12)

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, adjusted earnings and free cash flow 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. Free cash flow is defined as net cash flows from operating activities less capital expenditures.

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
(in thousands)11/30/20238/31/20235/31/20232/28/202311/30/2022
Net earnings$176,273 $184,166 $233,971 $179,849 $261,774 
Interest expense11,756 8,259 8,878 9,945 13,045 
Income taxes48,422 53,742 76,099 55,641 76,725 
Depreciation and amortization69,186 61,302 55,129 51,216 51,183 
Asset impairments— 3,734 1 36 9 
Adjusted EBITDA305,637 311,203 374,078 296,687 402,736 
Non-cash equity compensation8,059 16,529 10,376 16,949 16,675 
Mill operational commissioning costs(1)
11,593 12,297 7,264 6,811 5,574 
Settlement of New Markets Tax Credit transaction— — — (17,659)— 
Core EBITDA$325,289 $340,029 $391,718 $302,788 $424,985 
Net sales$2,003,051 $2,209,228 $2,344,989 $2,018,003 $2,227,313 
Core EBITDA margin16.2%15.4%16.7%15.0%19.1%
__________________________________
(1) Net of depreciation.


(CMC First Quarter Fiscal 2024 - 13)

A reconciliation of net earnings to adjusted earnings is provided below:
 Three Months Ended
(in thousands, except per share data)11/30/20238/31/20235/31/20232/28/202311/30/2022
Net earnings$176,273 $184,166 $233,971 $179,849 $261,774 
Asset impairments— 3,734 1 36 9 
Mill operational commissioning costs20,752 16,131 7,287 6,825 5,584 
Settlement of New Markets Tax Credit transaction— — — (17,659)— 
Total adjustments (pre-tax)$20,752 $19,865 $7,288 $(10,798)$5,593 
Related tax effects on adjustments(4,358)(4,172)(1,530)2,268 (1,175)
Adjusted earnings$192,667 $199,859 $239,729 $171,319 $266,192 
Net earnings per diluted share$1.49 $1.56 $1.98 $1.51 $2.20 
Adjusted earnings per diluted share1.63 1.69 2.02 1.44 2.24 

A reconciliation of net cash flows from operating activities to free cash flow is provided below:
 Three Months Ended
(in thousands)11/30/2023
Net cash flows from operating activities$261,060 
Capital expenditures(66,991)
Free cash flow$194,069 






Media Contact:
Susan Gerber
(214) 689-4300

Q1 FY 2024 Supplemental Slides

 
2Q1 FY24 Supplemental Slides January 8, 2024 This presentation 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 organic 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 Emerging Businesses Group, share repurchases, legal proceedings, construction activity, international trade, the impact of the Russian invasion of Ukraine, 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 timeline for execution of our growth plan and our expectations or beliefs concerning future events. The statements in this presentation 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. Our forward-looking statements are based on management’s expectations and beliefs as of the date of this presentation. 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, 2023, 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 the Russian invasion of Ukraine 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 or environmental justice initiatives; operating and start-up 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; our ability to successfully execute leadership transitions; 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; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots. Forward-Looking Statements

 
3Q1 FY24 Supplemental Slides January 8, 2024 Leading positions in core products and geographies Focused strategy that leverages capabilities, competitive strengths, and market knowledge Strong balance sheet and cash generation provide flexibility to execute on strategy Vertical structure optimizes returns through the entire value chain Disciplined capital allocation focused on maximizing returns for our shareholders Increasing Shareholder Value With a Winning Formula

 
4 Key Takeaways From Today’s Call Strong first quarter financial results • While down from recent levels, Q1 Core EBITDA still among the best in CMC history • Strong cash flow from operating activities and free cash flow Realigned segment reporting to enhance visibility into value drivers, growth plan, and strategic execution Healthy demand levels in North America; steel product margins should inflect in the coming months Conditions in Europe remain challenging, but green shoots provide encouragement Positive North America long-term fundamentals are intact, supported by infrastructure spending programs and outlook for large-scale industrial projects Solid financial position • Balance sheet strength and cash flow profile continue to provide capital allocation flexibility Q1 FY24 Supplemental Slides January 8, 2024 $1.49 Q1 Diluted EPS [1] Core EBITDA , annualized return on invested capital, adjusted earnings, and adjusted EPS are non-GAAP financial measures. For definitions and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. [2] Adjusted EPS is on a per diluted share basis $325 million $1.63 14.9% Q1 Core EBITDA1 Q1 Adjusted EPS1,2 Q1 Annualized ROIC1 ✔ ✔ ✔ ✔ ✔ ✔ $176 million Q1 Net Earnings $193 million Q1 Adjusted Earnings1

 
5 Line of Business Description Strategic Focus Realignment of Reportable Segments Q1 FY24 Supplemental Slides January 8, 2024 Steel vertical value chain • Metals recycling • Steel mills • Rebar fabrication • Fence post fabrication • Post-tension cable Engineered solutions and custom services • Soil stabilization • Construction and contractor services • High-performance heat treating • Reinforcement anchoring systems • High-performance reinforcement solutions Steel vertical value chain • Metals recycling • Steel mill • Rebar fabrication • Wire mesh fabrication Performance Reinforcing Steel CMC Impact Metals™ CMC Construction Services™ CMC Anchoring Systems North America Steel Group Emerging Businesses Group (EBG) Europe Steel Group EBG businesses carved out of former Europe segment FY ‘23 Recast ($ mil) Net Sales $6,704 $722 $1,329 Adj EBITDA 1,328 139 48 Adj EBITDA Mgn 19.8% 19.3% 3.6% • Operational and commercial optimization • Margin enhancement and reduced volatility • Product and process innovation • Growth through bolt-ons • Organic and acquisitive growth • Commercial synergies with steel groups • Addition of solutions capabilities and buildout of adjacencies EBG businesses carved out of former North America segment • Operational and commercial optimization • Margin enhancement and reduced volatility • Product and process innovation • Growth through bolt-ons

 
6 Cash Flow Margin Profile Growth Outlook Emerging Businesses Group Characteristics Q1 FY24 Supplemental Slides January 8, 2024 % • Higher organic growth rate − Relatively low penetration of proprietary solutions and targeted applications − Potential for portfolio synergies • Broad geographical commercial coverage • Strong potential for growth through acquisitions • Commercial tie-ins with steel groups • Less market and product maturity Business profile relative to more mature steel markets • Higher, more defensible margins through-the- cycle • Greater intellectual property value and unique customer value propositions • Potential to further enhance margins through mix − Continued adoption of higher margin proprietary solutions − Margin accretive acquisitions • Lower capital intensity − Organic growth through product innovation and portfolio synergies • Higher rate of free cash flow conversion • Lower working capital requirements and less margin volatility • Higher free cash flow yield

 
7 Description Business Drivers Tensar Geogrid and Geopiers • Geogrids provide soil stabilization for road, foundation, and other construction applications • Geopiers are custom engineered solutions for building foundations in almost all soil types • Commercial access to over 80 countries • Increased market penetration (currently below 10% of estimated addressable market) • Infrastructure investment • Access roads to renewable energy generation sites • General construction spending trends CMC Construction Services • Retail operations servicing concrete contractors • Provides one of the largest concrete product inventories in the U.S. • 24 locations, mainly focused in Texas • Construction activity in the South-Central U.S., particularly Texas • Population growth in Texas CMC Impact Metals • Leader in the production of heat-treated performance steel products • Two production locations • Truck and trailer fleet expansion • Defense spending • Construction spending CMC Anchoring Systems • Leading provider of anchoring solutions for the electrical transmission market • Four locations with commercial access to entire continental U.S. • Investments in electrical transmission and distribution • Growth of renewable energy generation requiring connection to U.S. electrical grids • Market share growth of steel monopoles within the transmission market Performance Reinforcing Steel • Proprietary reinforcing steel products used in critical applications • Engineered for enhanced properties including corrosion resistance, high-strength, and/or extreme temperature resistance • Coastal bridge and highway construction • Port construction and repairs • LNG investments Emerging Businesses Group – In Focus >85% of FY 2023 EBG Sales Derived from North America 23% 22% 27% 28% 25% 23% 26% 26% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% Q1 Q2 Q3 Q4 Emerging Businesses Group North America Steel Group Seasonality – % of Annual Total by Quarter Emerging Businesses seasonality by net sales North America Steel seasonality by finished steel volumes  Activity levels at Emerging Businesses Group have tended to have greater seasonal volatility relative to the North America Steel Group Q1 FY24 Supplemental Slides January 8, 2024

 
8 Structural Trends Expected to Support North America Construction RESHORING AND SUPPLY CHAIN REALIGNMENT ENERGY TRANSITION AND LNG INVESTMENTS Significant structural investment is expected to power domestic construction and rebar consumption over a multi-year period. In addition to direct investments, the indirect impact should also be meaningful as many large-scale projects will require local investments in infrastructure, non-residential structures, and residential dwellings. Semiconductor & Supporting Investments3 69 projects $315 billion Electric Vehicle and Battery Plants4 124 projects >$150 billion Clean Energy Generation Investments5 ~$241 billion announced since August 2022 [1] Data for September to November 2023 vs. September to November 2022 [2] Data from American Road and Transportation Builders’ Associations [3] Data from Semiconductor Industry Association [4] Data from Environmental Defense Fund [5] Data from American Clean Power Association [6] Company estimates Manufacturing Facilities for Clean Energy5 ~$34 billion announced since August 2022 INFRASTRUCTURE INVESTMENT Dodge Analytics Infrastructure Pre-Design & Design Projects1 +1,100% Y/Y (trailing 3-mo) FY 2024 State DOT Highway Budgets2 +13% vs. prior year Government Support for Investment $550 billion from IIJA $52 billion CHIPS Act $250 billion Inflation Reduction Act $12 billion DOE loans Funding from IRA Q1 FY24 Supplemental Slides January 8, 2024 Estimated Potential Impact on Rebar Demand6 (at full run-rate relative to current annual domestic demand ~9 million tons) +15% to 17% +3% to 5% +2% to 4%

 
9 GDP Growth Outlook Polish economy is expected to grow by 3.1% in 2024 per S&P Recent Market Developments Europe Market Environment Remained Challenging [1] Data from S&P Global manufacturing PMI report [2] Data from Statistics Poland for September and October 2023 vs. September and October 2022 [3] Data from Eurofer and Statistics Poland Emerging green shoots: • Mortgage subsidy program for first-time homebuyers has gained traction; mortgage origination has rebounded sharply • Expected release of €60 billion to Poland from the EU Recovery and Resilience fund Conditions during the first quarter continued to be difficult, but several green shoots have emerged that could bolster activity in the quarters ahead. Demand Supply Costs Macroeconomic Backdrop Manufacturing Germany and Poland PMIs below 50 for 17 consecutive months1 Energy Costs Natural gas purchase contracts repriced on Oct 1, 2023; reduces cost per ton by $15 to $20 Long Product Imports EU and Polish imports down y/y3 Residential Construction Housing permits granted up 11% y/y2 Total Construction Polish cement production down 7% y/y2 Long Product Production Polish long steel production down ~17% y/y2 Energy Rebates Recognized $66.3M in rebates as reimbursement for high energy related costs incurred Interest Rates Central bank has reduced rates by 100bps since early Sep 2023 to stimulate growth Cost Position CMC remains one of the lowest cost long products producers in Europe Inflation Inflation is down from its 2023 peak y/y change of 18.4%, but remains high at 6.5% Q1 FY24 Supplemental Slides January 8, 2024

 
10 • North America Steel Group shipments expected to decline sequentially on typical seasonality; steel product margins to experience further compression − Beyond the second quarter, recent price announcements should support an inflection in steel product margins • Conditions for Europe Steel Group expected to remain challenging, but adjusted EBITDA excluding energy rebates should improve from the levels of Q4 and Q1 • Financial results for Emerging Businesses Group anticipated to be seasonally lower • Spring and summer construction activity expected to be robust in North America, which should benefit financial results for both the North America Steel Group and the Emerging Businesses Group during the second half of fiscal 2024 • Demand conditions in North America remained supportive − Finished steel shipments increased 1% y/y, while rebar shipments (mill direct rebar and downstream) improved 3% from a year ago • North America Steel Group steel product margin declined $146 per ton from the prior year period • Downstream product margins over scrap1 remained near record levels with the positive impact modestly offset by lower y/y downstream shipment volumes • North America Steel Group controllable costs per ton of finished steel were largely unchanged from the prior year period − Adjusted EBITDA in first quarter of fiscal 2024 included $11.6 million related to Arizona 2 commissioning costs compared to $5.6 million during the first quarter of fiscal 2023 • Recognition of $66.3 million in energy cost rebates more than offset the impact of difficult market conditions at Europe Steel Group − Margins over scrap cost declined $158 per ton on a y/y basis − Shipments decreased by 27% from the prior year period • Emerging Businesses Group grew net sales 3.9% y/y, driven by the acquisition of CMC Anchoring Systems − Generally positive demand conditions in North America; activity was slowed somewhat by weather delays in the Central U.S. • EBG adjusted EBITDA margin declined 100 basis points y/y − Positive impacts from improved adoption rates of high margin proprietary products and addition of CMC Anchoring Systems offset by weather delays in the Central U.S. and lower construction activity in Europe Pe rf or m an ce D riv er s O ut lo ok Q1 Operational Update [1] Downstream Product Margin Over Scrap equals Average Selling Price minus cost of ferrous scrap utilized during the prior quarter Q1 FY24 Supplemental Slides January 8, 2024

 
11 425 325 (83) (22) (1) 9 (3) 0 50 100 150 200 250 300 350 400 450 Q1 2023 NA Steel Group EBITDA Europe Steel Group EBITDA Emerging Businesses Group EBITDA Corp & Eliminations Other Non- Op Items Q1 2024 Q1 Consolidated Operating Results Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 External Finished Steel Tons Shipped1 1,559 1,411 1,599 1,533 1,442 Core EBITDA2 $424,985 $302,788 $391,718 $340,029 $325,289 Core EBITDA per Ton of Finished Steel Shipped2 $273 $215 $245 $222 $226 Core EBITDA Margin2 19.1% 15.0% 16.7% 15.4% 16.2% Adjusted Earnings2 $266,192 $171,319 $239,729 $199,859 $192,667 Performance Summary Units in 000’s except per ton amounts • Costs related to commissioning activities at Arizona 2 micro mill − $20.8 million impact to pre-tax income − $11.6 million impact to core EBITDA Non-Operating Adjustments Figures are pre-tax for Q1 2024 [1] External Finished Steel Tons Shipped equal to shipments of Steel Products plus Downstream Products [2] Core EBITDA, Core EBITDA margin, Core EBITDA per ton of finished steel shipped, and adjusted earnings are non-GAAP measures. For reconciliations of non- GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. Core EBITDA Bridge – Q1 2023 to Q1 2024 $ Millions Q1 FY24 Supplemental Slides January 8, 2024

 
12 322 281 314 294 243 1,012 1,096 1,106 1,044 1,048 695 639 595 594 549 0 50 100 150 200 250 300 350 0 200 400 600 800 1,000 1,200 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1' 24 Adjusted EBITDA per Ton of Finished Steel Shipped Downstream Products Margin Over Scrap (1 Qtr Lag) Steel Products Margin Over Scrap 322 243 4 (53) (26) (5) 200 225 250 275 300 325 350 Q1 '23 Adj EBITDA per Ton Raw Materials Steel Products Downstream Controllable Cost & Other Q1 '24 Adj EBITDA per Ton Key Performance Drivers Q1 2024 vs Q1 2023 Q1 North America Steel Group Q1 ‘23 Q2 ‘23 Q3 ’23 Q4 ’23 Q1 ’24 External Finished Steel Tons Shipped[1] 1,086 975 1,170 1,144 1,099 Adjusted EBITDA $349,787 $274,240 $367,561 $336,843 $266,820 Adjusted EBITDA per Ton of Finished Steel Shipped $322 $281 $314 $294 $243 Adjusted EBITDA Margin 21.0% 18.2% 20.2% 19.6% 16.8% Performance Summary Units in 000’s except per ton amounts • Decline in steel product margins over scrap − Down approximately $146 per ton y/y • Downstream product margins over scrap cost remained near record levels − Full value chain profitability on sales of downstream products above long-term average • Commissioning costs related to the operational start-up of Arizona 2 increased approximately $6 million compared to the prior year period • Increased volumes of steel products supported results (up 6.8% y/y) • Controllable cost impact was neutral compared to the prior year (includes Arizona 2 commissioning costs) [1] External Finished Steel Tons Shipped equal to shipments of Steel Products plus Downstream Products [2] Downstream Product Margin Over Scrap equals Average Selling Price minus cost of ferrous scrap utilized during the prior quarter [3] Steel Products Margin Over Scrap equals Average Selling Price minus Cost of ferrous scrap utilized North America Steel Group – Key Margins $ / ton SP a nd D P M ar gi n O ve r S cr ap Adjusted EBITDA per ton Adjusted EBITDA Per Ton Bridge – Q1 2023 to Q1 2024 $ / ton of external finished steel shipped [2] [3] [2] Impact of Volume and Margin Over Scrap Cost Q1 FY24 Supplemental Slides January 8, 2024

 
13 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 426 367 326 284 268 129 26 14 (77) 114 (100) 0 100 200 300 400 500 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1' 24 Steel Products Margin Over Scrap Adjusted EBITDA per Ton Key Performance Drivers Q1 2024 vs Q1 2023 Q1 Europe Steel Group Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 External Finished Steel Tons Shipped1 473 436 429 389 343 Adjusted EBITDA $61,248 $11,469 $5,837 ($30,081) $38,942 Adjusted EBITDA per Ton of Finished Steel Shipped $129 $26 $14 ($77) $114 Adjusted EBITDA Margin 15.8% 3.4% 1.8% (11.0%) 17.3% Performance Summary Units in 000’s except per ton amounts • Recognized approximately $66.3 million in energy cost rebates during Q1, up from $9.5 million during the prior year period • Margins over scrap declined from the prior year period − Down $158 per ton y/y • Shipment volumes declined 27% from the prior year period Europe Steel Group – Key Margins $ / ton Poland Monthly New Mortgage Originations3 PLN in thousands 2 Notes: [1] External Finished Steel Tons Shipped equal to shipments of Steel Products [2] Steel Products Margin Over Scrap equals Average Selling Price minus Cost of ferrous scrap utilized [3] Source: National Bank of Poland M ar gi n O ve r S cr ap a nd A dj us te d EB IT DA Q1 FY24 Supplemental Slides January 8, 2024

 
14 Key Performance Drivers Q1 2024 vs Q1 2023 Q1 Emerging Businesses Group Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Net sales from external customers $170,534 $153,598 $189,055 $208,559 $177,239 Adjusted EBITDA $31,427 $26,551 $38,395 $42,612 $30,862 Adjusted EBITDA Margin 18.4% 17.3% 20.3% 20.4% 17.4% Performance Summary Units in 000’s except margins • Addition of CMC Anchoring Systems contributed positively to adjusted EBITDA and drove y/y improvement in net sales • Adjusted EBITDA margins benefited from further adoption of proprietary InterAx geogrid and addition of anchoring systems − Offset by weather impacts at CMC Construction Services and slower geogrid sales in Europe and Middle East Contribution to Net Sales Change – Q1 2023 to Q1 2024 Quarterly net sales figures in $ million, contribution to net sales changes provided in percentages Q1 FY24 Supplemental Slides January 8, 2024 171 177 (1%) (3%) 1% 0% 7% 100 110 120 130 140 150 160 170 180 190 Q1 2023 Geogrids & Geopiers Construction Services Impact Metals Performance Reinforcing Steels Anchoring Systems Q1 2024 Q ua rt er ly n et s al es in $ m ill io n; ne t s al es c ha ng es in p er ce nt ag es Net sales up 3.9% Directional Change in Underlying Margin Performance

 
15 2 31 Disciplined Capital Allocation Strategy CMC Capital Allocation Priorities: $350 million share repurchase program ($58 million remaining1) Quarterly dividend of $0.16 per share (last increased 14% in Q4 2022) Shareholder Cash Distribution Programs in Place Value-Generating Growth Shareholder Distributions Debt Management CMC will prudently allocate capital while maintaining a strong and flexible balance sheet Q1 FY24 Supplemental Slides January 8, 2024 • Cash flow from earnings • Working capital release 2024 Sources and Potential Sources of Cash • Sustaining capital expenditures • Growth − Completion of Arizona 2 − Construction of CMC Steel West Virginia − Opportunistic M&A • Cash distributions to shareholders − Share repurchases − Cash dividends 2024 Uses and Potential Uses of Cash [1] As of November 30, 2023

 
16 $803 $5 $37 $2 $141 $155 $279 $380 $1,270 $911 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 LTM Q1 '24 Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders1 (in millions) CMC’s cash flow capabilities have been greatly enhanced through our strategic transformation FY 2024 capital expenditures expected in a range of $550 million to $600 million Source: Public filings, Internal data [1] Adjusted EBITDA less Sustaining Capital Expenditures and Disbursements to Stakeholders is a non-GAAP financial measure. For reconciliations of non- GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. Gain on California land sale Q1 FY24 Supplemental Slides January 8, 2024

 
17 $300 $300 $300 $145 $600 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 $72 $149 $599 $705 Balance Sheet Strength [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% Revolver Poland Credit Facilities (US$ in millions) Revolving Credit Facility 4.125% Notes Cash and Cash Equivalents 3.875% Notes Debt maturity profile provides strategic flexibility Debt Maturity Profile Q1 FY’24 Liquidity (US$ in millions) 4.375% Notes 4.0% Bond1 Poland Accounts Receivable Facility Q1 FY24 Supplemental Slides January 8, 2024

 
18 45 % 46 % 42 % 37 % 33 % 32 % 24 % 18 % 21 % 22 % 20 % 17 % 18 % 14 % 24 % 17 % 15 % 15 % 13 % 11 % 8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 3. 8x 3. 9x 3. 2x 2. 5x 1. 9x 1. 6x 1. 2x 0. 9x 1. 1x 1. 2x 1. 0x 0. 8x 0. 7x 0. 5x 0. 7x 0. 5x 0. 4x 0. 5x 0. 5x 0. 4x 0. 3x NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x Source: Public filings, Internal data Notes: 1. Total debt is defined as long-term debt plus current maturities of long-term debt and short-term borrowings. 2. Net Debt is defined as total debt less cash & cash equivalents. 3. EBITDA depicted is adjusted EBITDA from continuing operations on a trailing 12-month basis. 4. Net debt-to-capitalization is defined as net debt on CMC’s balance sheet divided by the sum of total debt and stockholders’ equity. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. Leverage Profile Financial strength gives us the flexibility to fund our announced projects, pursue opportunistic M&A, and distribute cash to shareholders Net Debt1,2 / EBITDA3 Net Debt-to-Capitalization4 Transformational rebar asset acquisition Tensar acquisition Construction of Arizona 2 Transformational rebar asset acquisition Tensar acquisition Construction of Arizona 2 Q1 FY24 Supplemental Slides January 8, 2024

 
2% 69% CMCGlobal Industry 1.18 28.60 CMCGlobal Industry 3.84 20.99 CMCGlobal Industry 0.68 1.91 CMCGlobal Industry 59 % Of goal Clear Sustainability Leader Q1 FY24 Supplemental Slides │ January 8, 2024 19 [1] Represents progress on environmental goals as of fiscal year 2023, compared to fiscal year 2019 Note: GHG emissions statistics for CMC include only steel mill operations, which represents over 95% of CMC’s emissions footprint Sources: CMC 2023 Sustainability Report; virgin material content for industry based on data from Bureau of International Recycling; all other industry data sourced from the World Steel Association CMC plays a key role in the circular steel economy, turning society’s metallic waste into the steel that forms the backbone of modern life ACCOUNTABILITY FOR OUR ACTIONS RESPECT FOR OUR ENVIRONMENT ACTING WITH INTEGRITY 2.2 1.8 1.0 0.42 Integrated Average Global Average U.S. Average CMC Scopes 1&2 Greenhouse Gas Emissions (GHG) Intensity tC O 2e p er M T of s te el Reduce our combined Scope 1 and 2 GHG emissions intensity by 20% Increase our renewable energy usage by 12% Reduce our energy consumption intensity by 5% Reduce our water withdrawal intensity by 8% 8 3 % Of goal 88 % Of goal 0 % Of goal Progress on 2030 Goals (2019 baseline[1]) Scopes 1-3 GHG Emissions Intensity tC O 2e p er M T of s te el Energy Intensity G J pe r M T of s te el Water Withdrawal Intensity Cu bi c m et er p er M T of s te el Virgin Materials Used in Steelmaking % o f s te el c on te nt

 
© CMC Appendix: Non-GAAP Financial Reconciliations

 
21 Adjusted EBITDA and Core EBITDA – Last 5 Quarters [1] See page 26 for definitions of non-GAAP measures [2] Net of depreciation Q1 FY24 Supplemental Slides January 8, 2024

 
22 Adjusted Earnings [1] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024

 
23 Annualized Return on Invested Capital [1] Federal statutory rate of 21% plus approximate impact of state level income tax [2] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024 2

 
24 [1] See page 26 for definitions of non-GAAP measures Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders Q1 FY24 Supplemental Slides January 8, 2024

 
25 Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024

 
26 Definitions for non-GAAP financial measures ADJUSTED EARNINGS Adjusted earnings is a non-GAAP financial measure that is equal to earnings before settlement for New Market Tax Credit transactions, asset impairments, mill operational commissioning costs, including the estimated income tax effects thereof. Adjusted earnings should not be considered as an alternative to net earnings or any other performance measure derived in accordance with GAAP. However, we believe that adjusted earnings provides relevant and useful information to investors as it allows: (i) a supplemental measure of our ongoing core performance and (ii) the assessment of period-to-period performance trends. Management uses adjusted earnings to evaluate our financial performance. Adjusted earnings may be inconsistent with similar measures presented by other companies. Adjusted earnings per diluted share (or adjusted EPS) is defined as adjusted earnings on a diluted per share basis. CORE EBITDA Core EBITDA is the sum of net earnings before interest expense and income taxes. It also excludes recurring non-cash charges for depreciation and amortization, asset impairments, and amortization of acquired unfavorable contract backlog. Core EBITDA also excludes debt extinguishment costs, settlement for New Market Tax Credit transactions, non-cash equity compensation, certain gains on sale of assets, certain facility closure costs, acquisition settlement costs, labor cost government refunds, acquisition and integration related costs, mill operational commissioning costs, CMC Steel Oklahoma incentives, severance, and purchase accounting effect on inventory. Core EBITDA should not be considered an alternative to earnings (loss) from continuing operations or net earnings (loss), or as a better measure of liquidity than net cash flows from operating activities, as determined by GAAP. However, we believe that Core EBITDA provides relevant and useful information, which is often used by analysts, creditors and other interested parties in our industry as it allows: (i) comparison of our earnings to those of our competitors; (ii) a supplemental measure of our ongoing core performance; and (iii) the assessment of period-to-period performance trends. Additionally, Core EBITDA is the target benchmark for our annual and long-term cash incentive performance plans for management. Core EBITDA may be inconsistent with similar measures presented by other companies. ADJUSTED EBITDA Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is the sum of the Company’s net earnings before interest expense, income taxes, depreciation and amortization expense, asset impairments, and amortization of acquired unfavorable contract backlog. Adjusted EBITDA should not be considered as an alternative to net earnings, or any other performance measure derived in accordance with GAAP. However, we believe that adjusted EBITDA provides relevant and useful information to investors as it allows: (i) a supplemental measure of our ongoing performance and (ii) the assessment of period-to-period performance trends. Management uses adjusted EBITDA to evaluate our financial performance. Adjusted EBITDA may be inconsistent with similar measures presented by other companies. ADJUSTED EBITDA LESS SUSTAINING CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS Adjusted EBITDA less sustaining capital expenditures and disbursements to shareholders is defined as Adjusted EBITDA less depreciation and amortization (used as a proxy for sustaining capital expenditures) less interest expense, less cash income taxes less dividend payments plus stock-based compensation. NET DEBT Net debt is defined as total debt less cash and cash equivalents. RETURN ON INVESTED CAPITAL Return on Invested Capital is defined as: 1) after-tax operating profit divided by 2) total assets less cash & cash equivalents less non-interest-bearing liabilities. For annual measures, trailing 5-quarter averages are used for balance sheet figures. FREE CASH FLOW Free cash flow is defined as cash from operations less capital expenditures. Q1 FY24 Supplemental Slides January 8, 2024

 
CMC.COM

 
v3.23.4
Cover
Jan. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 08, 2024
Entity Registrant Name Commercial Metals Company
Entity Incorporation, State or Country Code DE
Entity File Number 1-4304
Entity Tax Identification Number 75-0725338
Entity Address, Address Line One 6565 N. MacArthur Blvd.
Entity Address, City or Town Irving
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75039
City Area Code 214
Local Phone Number 689-4300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol CMC
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000022444
Amendment Flag false
Commercial Metals (NYSE:CMC)
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