Le Lézard
Classified in: Mining industry, Business
Subjects: ERN, ERP

Commercial Metals Company Reports First Quarter Fiscal 2018 Earnings Per Share Of $0.31



IRVING, Texas, Jan. 3, 2018 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) today announced financial results for its first quarter ended November 30, 2017. Net earnings for the first quarter of fiscal 2018 were $36.8 million ($0.31 per diluted share) on net sales of $1.2 billion. This compares to net earnings of $6.3 million ($0.05 per diluted share) on net sales of $1.0 billion for the first quarter of fiscal 2017.  Earnings from continuing operations were $38.5 million for the first quarter of fiscal 2018, compared to $4.9 million for the same period of the prior fiscal year.   For the three months ended November 30, 2017, earnings from continuing operations included a net after tax benefit of $1.8 million, or $0.02 per diluted share, related to the exit of the International Marketing and Distribution segment.

As a result of the August 31, 2017 sale of CMC Cometals, the results of this division have been reflected as discontinued operations for all reported periods.

The Company's liquidity position at November 30, 2017 remained strong, with cash and cash equivalents of $130.2 million and availability under the Company's credit and accounts receivables sales facilities of approximately $617.5 million. The Company regularly evaluates the use of its cash in efforts to maximize total shareholder return, including debt repayment, capital deployment, share repurchases and dividends.

Barbara Smith, President and CEO, commented, "We delivered strong financial results during our first fiscal quarter of 2018.   In both the Americas Mills and International Mill segments, demand from the construction sector remained robust, which resulted in very good earnings. In fact, the Polish operations recorded the highest quarterly profits since 2008.  The America's Recycling segment also had the highest quarterly results since 2012 supported by rising non-ferrous pricing and a continued strong demand for ferrous material."

On January 2, 2018, the board of directors of CMC declared a quarterly dividend of $0.12 per share for shareholders of record on January 16, 2018.  The dividend will be paid on January 31, 2018.

Business Segments-Fiscal First Quarter 2018 Review
Our Americas Recycling segment recorded adjusted operating profit of $9.9 million for the first quarter of fiscal 2018 compared to an adjusted operating loss of $5.1 million for the first quarter of fiscal 2017. The improvement in adjusted operating profit compared to the same period in fiscal 2017 was primarily the result of strong volumes and non-ferrous prices which rose during the quarter.  Shipment volumes in comparison to the same period of the prior fiscal year increased by 44% as a result of higher domestic steel manufacturing utilization rates and the impact of the acquisition of yards completed during fiscal 2017.

Our Americas Mills segment recorded adjusted operating profit of $40.8 million for the first quarter of fiscal 2018 compared to adjusted operating profit of $36.9 million for the corresponding period in fiscal 2017.  We had a strong shipping quarter as non-residential construction activity remains high.  While metal margins were relatively flat in comparison to the same period in the prior fiscal year, they increased for the second consecutive fiscal quarter and were $14 per ton higher than the fourth quarter of fiscal 2017.

Our Americas Fabrication segment recorded an adjusted operating loss of $4.8 million for the first quarter of fiscal 2018 compared to adjusted operating profit of $6.7 million for the first quarter of fiscal 2017.  The average selling price for the Americas Fabrication segment was similar to the same period of fiscal year 2017; however, raw material rebar prices have increased resulting in the losses suffered during the recent quarters.  We are experiencing strong bidding activity for fabrication work, but strong competitive pressures and the availability of low cost import material have not provided a market dynamic for the increased raw material costs to be passed on to customers in the form of increased selling prices.

Our International Mill segment in Poland recorded adjusted operating profit of $23.4 million for the first quarter of fiscal 2018 compared to adjusted operating profit of $10.0 million for the corresponding period in fiscal 2017.  Shipments from this operation increased by approximately 27% in comparison to the same period of the prior fiscal year, supported by continued strength in construction activity in this market which has also resulted in improved margins. 

Outlook
Smith continued, "During our second quarter we normally experience lower shipment levels due to winter weather conditions impairing construction activity as well as a reduced number of shipping days. However, we see strength in the underlying market fundamentals supporting each of our segments as we enter calendar 2018.  End markets in both non-residential construction and original equipment manufacturers are forecasting growth and we are seeing that reflected in our shipment volumes."

"This is an exciting time for Commercial Metals Company. We are pleased to report that commissioning activities at our new micro mill in Durant, OK are progressing very smoothly, and we look forward to the mill contributing to our results during the second half of fiscal 2018.  In addition, yesterday, we announced the signing of a definitive agreement to acquire certain U.S. rebar assets from Gerdau S.A. including four mini mills and 33 rebar fabrication facilities. We believe this is an ideal strategic fit with CMC given our existing expertise in concrete reinforcing products and services.  We see significant opportunity for cost synergies and value creation for our customers and shareholders."

Conference Call
CMC invites you to listen to a live broadcast of its first quarter of fiscal 2018 conference call today, Wednesday, January 3, 2018, at 11:00 a.m. ETBarbara Smith, President and CEO, and Mary Lindsey, Senior Vice President and CFO, 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, including any non-GAAP disclosures, presented in the broadcast are located on CMC's website under "Investors."

About Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including four electric arc furnace ("EAF") mini mills, an EAF micro mill, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.

Forward-Looking Statements
This news release contains forward-looking statements regarding CMC's expectations relating to key macro economic drivers that impact its business including demand, steel margins and effects of the ongoing trade actions in the U.S. and Poland.  These forward-looking statements generally can be identified by phrases such as we, CMC or its management, "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears," "potential," "outlook," or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. 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, CMC undertakes 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 otherwise.

Factors that could cause actual results to differ materially from CMC's expectations include 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; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; compliance with and changes in environmental laws and regulations, including increased regulation associated with climate change and greenhouse gas emissions; potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; currency fluctuations; global factors, including political uncertainties and military conflicts; availability of electricity and natural gas for mill operations; information technology interruptions and breaches in data security; ability to hire and retain key executives and other employees; our ability to make necessary capital expenditures; availability and pricing of raw materials over which we exert little influence, including scrap metal, energy, insurance and supply prices; unexpected equipment failures; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; 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; increased costs related to health care reform legislation; and risks related to acquisitions and dispositions.

 

COMMERCIAL METALS COMPANY

OPERATING STATISTICS (UNAUDITED)




Three Months Ended November 30,



Three Months Ended

(short tons in thousands)


2017


2016



8/31/2017


5/31/2017


2/28/2017

Americas Recycling












    Ferrous tons shipped


589



405




583



590



421


    Nonferrous tons shipped


66



49




70



61



53


Americas Recycling tons shipped


655



454




653



651



474














Americas Steel Mills












    Rebar shipments


407



404




448



445



406


    Merchant and other shipments


270



231




262



277



252


Americas Steel Mills tons shipped


677



635




710



722



658














    Average selling price (total sales)


$

550



$

499




$

537



$

540



$

524


    Average cost ferrous scrap utilized


256



201




257



266



245


Americas Steel Mills metal margin


$

294



$

298




$

280



$

274



$

279














International Mill












    Tons shipped


400



316




396



354



313














    Average selling price (total sales)


$

517



$

397




$

476



$

443



$

402


    Average cost ferrous scrap utilized


296



202




269



253



229


International Mill metal margin


$

221



$

195




$

207



$

190



$

173














Americas Fabrication












    Rebar shipments


237



248




260



275



226


    Structural and post shipments


27



25




26



35



27


Americas Fabrication tons shipped


264



273




286



310



253














Americas Fabrication average selling price (excluding stock and buyout sales)


$

778



$

782




$

773



$

775



$

756


 

COMMERCIAL METALS COMPANY

BUSINESS SEGMENTS (UNAUDITED)


(in thousands)


Three Months Ended
November 30,


Three Months Ended

Net sales


2017


2016


8/31/2017


5/31/2017


2/28/2017

Americas Recycling


$

319,334



$

176,708



$

317,298



$

294,166



$

223,328


Americas Mills


413,518



347,165



414,420



427,276



376,593


Americas Fabrication


332,779



338,400



353,726



379,976



303,826


International Mill


220,467



134,401



200,227



167,629



134,305


International Marketing and Distribution


163,298



166,837



185,337



223,134



206,056


Corporate


4,198



1,750



2,124



1,909



3,842


Eliminations


(215,075)



(171,170)



(212,151)



(233,391)



(194,046)


Total net sales


$

1,238,519



$

994,091



$

1,260,981



$

1,260,699



$

1,053,904













Adjusted operating profit (loss) from continuing operations











Americas Recycling


$

9,928



$

(5,098)



$

2,868



$

9,286



$

7,766


Americas Mills


40,764



36,949



29,803



50,734



51,319


Americas Fabrication


(4,782)



6,711



(4,928)



1,808



506


International Mill


23,393



9,973



14,621



12,953



9,430


International Marketing and Distribution


10,531



(3,758)



(26,640)



5,723



351


Corporate


(21,168)



(24,013)



(52,419)



(20,880)



(22,317)


Eliminations


(1,569)



(209)



(822)



771



(574)


Adjusted operating profit (loss) from continuing operations


$

57,097



$

20,555



$

(37,517)



$

60,395



$

46,481


 

COMMERCIAL METALS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)




Three Months Ended November
30,

(in thousands, except share and per share data)


2017


2016

Net sales


$

1,238,519



$

994,091


Costs and expenses:





Cost of goods sold


1,074,938



870,278


Selling, general and administrative expenses


106,742



103,485


Interest expense


6,525



13,292




1,188,205



987,055







Earnings from continuing operations before income taxes


50,314



7,036


Income taxes


11,778



2,100


Earnings from continuing operations


38,536



4,936







Earnings (loss) from discontinued operations before income taxes (benefit)


(1,898)



1,873


Income taxes (benefit)


(172)



534


Earnings (loss) from discontinued operations


(1,726)



1,339







Net earnings


36,810



6,275







Basic earnings (loss) per share:





Earnings from continuing operations


$

0.33



$

0.04


Earnings (loss) from discontinued operations


(0.01)



0.01


Net earnings


$

0.32



$

0.05







Diluted earnings (loss) per share:





Earnings from continuing operations


$

0.32



$

0.04


Earnings (loss) from discontinued operations


(0.01)



0.01


Net earnings


$

0.31



$

0.05







Cash dividends per share


$

0.12



$

0.12


Average basic shares outstanding


116,243,545



115,097,467


Average diluted shares outstanding


117,857,911



116,604,789


 

COMMERCIAL METALS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(in thousands)


November 30,
 2017


August 31,
 2017

Assets





Current assets:





Cash and cash equivalents


$

130,209



$

252,595


Accounts receivable, net


772,588



706,595


Inventories, net


564,757



614,459


Other current assets


132,943



140,251


Total current assets


1,600,497



1,713,900


Net property, plant and equipment


1,092,808



1,061,283


Goodwill


64,940



64,915


Other assets


140,331



135,033


Total assets


$

2,898,576



$

2,975,131


Liabilities and stockholders' equity





Current liabilities:





Accounts payable


$

244,700



$

282,127


Accrued expenses and other payables


234,177



307,129


Current maturities of long-term debt


21,246



19,182


Total current liabilities


500,123



608,438


Deferred income taxes


57,590



49,197


Other long-term liabilities


102,105



110,986


Long-term debt


803,785



805,580


Total liabilities


1,463,603



1,574,201


Stockholders' equity attributable to CMC


1,434,800



1,400,757


Stockholders' equity attributable to noncontrolling interests


173



173


Total equity


1,434,973



1,400,930


Total liabilities and stockholders' equity


$

2,898,576



$

2,975,131


 

COMMERCIAL METALS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)




Three Months Ended November 30,

(in thousands)


2017


2016

Cash flows from (used by) operating activities:





Net earnings


$

36,810



$

6,275


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





Depreciation and amortization


32,193



30,290


Deferred income taxes


9,312



(12,418)


Stock-based compensation


4,780



8,245


Provision for losses on receivables, net


1,901



1,528


Asset impairment


1,480



462


Net (gain) loss on disposals of assets and other


(228)



41


Write-down of inventories


87



508


Amortization of interest rate swaps termination gain


?



(1,899)


Tax benefit from stock plans


?



(334)


Changes in operating assets and liabilities:


(120,537)



(33,652)


Net cash flows used by operating activities


(34,202)



(954)


Cash flows from (used by) investing activities:





Capital expenditures


(59,681)



(42,965)


Asset acquisition


(6,980)



?


Proceeds from the sale of subsidiaries


2,260



524


Proceeds from the sale of property, plant and equipment and other


560



179


Decrease in restricted cash, net


243



16,609


Net cash flows used by investing activities


(63,598)



(25,653)


Cash flows from (used by) financing activities:





Cash dividends


(13,993)



(13,862)


Stock issued under incentive and purchase plans, net of forfeitures


(9,520)



(7,661)


Repayments on long-term debt


(2,979)



(3,161)


Increase in documentary letters of credit, net


2,141



320


Tax benefit from stock plans


?



334


Net cash flows used by financing activities


(24,351)



(24,030)


Effect of exchange rate changes on cash


(235)



(1,740)


Decrease in cash and cash equivalents


(122,386)



(52,377)


Cash and cash equivalents at beginning of year


252,595



517,544


Cash and cash equivalents at end of period


$

130,209



$

465,167


COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL MEASURES (UNAUDITED)

This press release contains financial measures not derived in accordance with generally accepted accounting principles ("GAAP"). Reconciliations to the most comparable GAAP measures are provided below.

Adjusted Operating Profit (Loss) from Continuing Operations is a non-GAAP financial measure. Adjusted operating profit (loss) from continuing operations is the sum of our earnings (loss) from continuing operations before interest expense, income taxes (benefit) and discounts on sales of accounts receivable. Adjusted operating profit (loss) from continuing operations should not be considered as an alternative to earnings (loss) from continuing operations or net earnings (loss), as determined by GAAP. However, we believe that adjusted operating profit (loss) from continuing operations provides relevant and useful information, which is often used by analysts, creditors and other interested parties 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 operating profit (loss) from continuing operations to evaluate our financial performance. For added flexibility, we may sell certain trade accounts receivable both in the U.S. and internationally. We consider sales of accounts receivable as an alternative source of liquidity to finance our operations, and we believe that removing these costs provides a clearer perspective of our operating performance. Adjusted operating profit (loss) from continuing operations may be inconsistent with similar measures presented by other companies.



Three Months Ended November 30,


Three Months Ended

(in thousands)


2017


2016


8/31/2017


5/31/2017


2/28/2017

Earnings (loss) from continuing operations


$

38,536



$

4,936



$

(32,673)



$

34,978



$

25,310


Interest expense


6,525



13,292



5,939



12,368



12,447


Income taxes (benefit)


11,778



2,100



(10,989)



12,819



8,524


Discounts on sales of accounts receivable


258



227



206



230



200


Adjusted operating profit (loss) from continuing operations


$

57,097



$

20,555



$

(37,517)



$

60,395



$

46,481


Adjusted EBITDA from Continuing Operations is a non-GAAP financial measure. Adjusted EBITDA from continuing operations is the sum of earnings (loss) from continuing operations before net earnings attributable to noncontrolling interests, interest expense and income taxes (benefit). It also excludes our largest recurring non-cash charge, depreciation and amortization, as well as long-lived asset and goodwill impairment charges, which are also non-cash. Adjusted EBITDA from continuing operations should not be considered as 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 adjusted EBITDA from continuing operations provides relevant and useful information, which is often used by analysts, creditors and other interested parties 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, adjusted EBITDA from continuing operations is the target benchmark for our annual and long-term cash incentive performance plans for management. Adjusted EBITDA from continuing operations may be inconsistent with similar measures presented by other companies.

There were no net earnings attributable to noncontrolling interests during the three months ended November 30, 2017 and 2016.



Three Months Ended November 30,


Three Months Ended

(in thousands)


2017


2016


8/31/2017


5/31/2017


2/28/2017

Earnings (loss) from continuing operations


$

38,536



$

4,936



$

(32,673)



$

34,978



$

25,310


Interest expense


6,525



13,292



5,939



12,368



12,447


Income taxes (benefit)


11,778



2,100



(10,989)



12,819



8,524


Depreciation and amortization


31,978



30,282



32,020



32,256



30,496


Impairment charges


1,480



388



7,615



70



91


Adjusted EBITDA from continuing operations


$

90,297



$

50,998



$

1,912



$

92,491



$

76,868


 

SOURCE Commercial Metals Company


These press releases may also interest you

at 06:00
Thunder Bridge Acquisition, Ltd. (the "Company") announced today that it priced its initial public offering of 22,500,000 units at $10.00 per unit. The units will be listed on the Nasdaq Capital Market ("Nasdaq") and will begin trading today under...

at 06:00
Experian Health, the healthcare industry leader for automating, integrating and transforming the front and back end revenue cycle management process, is committed to securely managing patient data and other healthcare transactions. To that end,...

at 06:00
Two studies released today by the W.K. Kellogg Foundation (WKKF) and Altarum conclude that New Orleans and Mississippi are poised for significant economic growth if their workforces are upskilled and better educated as part of a collaborative effort...

at 06:00
Vanderbilt Mortgage and Finance, Inc., a Berkshire Hathaway company, has released a video that demonstrates the company's ongoing mission to provide a world-class customer experience for home buyers across the country.  Through its efforts to provide...

at 06:00
Facing sluggish industry growth and agile new competition, insurance executives are actively pursuing acquisitions and partnerships to transform and grow their businesses, according to a new report from KPMG International, Accelerated evolution ?...

at 06:00
ThetaRay seals deal to improve post-transaction monitoring and detect financial crime One of the leading banks in Northwest Europe, ABN AMRO Bank N.V., has chosen ThetaRay's machine learning solution to improve the effectiveness and efficiency of...




News published on 3 january 2018 at 06:45 and distributed by: