Commercial Metals Company Reports Third Quarter Earnings Per Share Of $0.20 And Announces Quarterly Dividend Of $0.12 Per Share

 Commercial Metals Company Reports Third Quarter Earnings Per Share Of $0.20
             And Announces Quarterly Dividend Of $0.12 Per Share

PR Newswire

IRVING, Texas, June 27, 2014

IRVING, Texas, June27, 2014 /PRNewswire/ --Commercial Metals Company (NYSE:
CMC) today announced financial results for its third quarter ended May31,
2014. Net earnings attributable to CMC for the third quarter were $23.6
million, or $0.20 per diluted share, on net sales of $1.8 billion. This
compares to net earnings attributable to CMC of $19.0 million, or $0.16 per
diluted share, on net sales of $1.8 billion for the three months ended May31,
2013.

Results for this year's third quarter included after-tax LIFO income of $5.3
million ($0.04 per diluted share), compared with after-tax LIFO income of
$10.7 million ($0.09 per diluted share) for the third quarter of fiscal 2013,
an unfavorable change of $5.4 million ($0.05 per diluted share). Adjusted
operating profit was $57.2 million for the third quarter of fiscal 2014,
compared with adjusted operating profit of $55.8 million for the prior year's
third quarter. Adjusted EBITDA was $90.0 million for the third quarter of
fiscal 2014, compared with adjusted EBITDA of $89.3 million for the prior
year's third quarter.

The Company's financial position at May31, 2014 remained strong with cash and
cash equivalents of $437.2 million and approximately $1.0 billion in total
liquidity, compared with cash and cash equivalents of $378.8 million and total
liquidity of $1.1 billion at August 31, 2013.

Joe Alvarado, Chairman of the Board, President, and CEO, commented, "The
results for the third quarter of fiscal 2014 were lifted by seasonal
construction activity. We are particularly pleased with the strong results
from our Americas Mills segment which recorded the best quarterly adjusted
operating profit since our first quarter of fiscal 2009. During the third
quarter of fiscal 2014, we successfully commissioned a new electric arc
furnace in Poland. Although final commissioning and debugging is ongoing, we
saw positive preliminary results. In June 2014, we acquired a small recycling
facility. This acquisition is consistent with our vertically-integrated
manufacturing model and will provide a low cost, reliable source of raw
material to our steel mill in Seguin, Texas."

On June 25, 2014, the board of directors of CMC declared a quarterly dividend
of $0.12 per share for shareholders of record on July 10, 2014. The dividend
will be paid on July 24, 2014.

Business Segments
Our Americas Recycling segment recorded adjusted operating loss of $1.1
million for the third quarter of fiscal 2014, compared with adjusted operating
profit of $3.2 million for the third quarter of fiscal 2013. Although ferrous
and nonferrous shipments increased 1% and 4%, respectively, a $1.0 million
unfavorable change in pre-tax LIFO income and an increase in employee related
expenses accounted for the decline in adjusted operating profit when compared
to the third quarter of fiscal 2013.

Our Americas Mills segment recorded adjusted operating profit of $74.1 million
for this year's third quarter, compared with adjusted operating profit of
$46.6 million for the prior year's third quarter. The increase in adjusted
operating profit was partially attributed to an $8.8 million favorable change
in pre-tax LIFO, from pre-tax LIFO expense of $1.7 million in the third
quarter of fiscal 2013 to pre-tax LIFO income of $7.1 million in the third
quarter of fiscal 2014. Additionally, tons shipped increased by 94 thousand
tons and the average cost of ferrous scrap consumed decreased $3 per short ton
in the third quarter of fiscal 2014 when compared to the third quarter of
fiscal 2013, resulting in a $15 per short ton increase in average metal
margin.

Our Americas Fabrication segment recorded adjusted operating profit of $1.2
million for this year's third quarter, compared with adjusted operating profit
of $13.5 million for the third quarter of fiscal 2013. The decline in adjusted
operating profit is primarily due to margin squeeze as input prices increased,
partially offset by an increase in shipments. Additionally, for the three
months ended May31, 2014, employee related expenses increased 14% as a result
of an increase in volume when compared to the same quarter of fiscal 2013.

Our International Mill segment recorded adjusted operating profit of $2.0
million for this year's third quarter, compared with adjusted operating loss
of $3.8 million for the prior year's third quarter. While tons shipped were
relatively stable for the current quarter when compared to the same quarter in
the prior year, sales prices increased by $28 per short ton and the cost of
ferrous scrap consumed decreased by $3 per short ton, resulting in a 13%
increase in metal margin, which contributed to the improved operating results.

Our International Marketing and Distribution segment recorded adjusted
operating profit of $1.5 million for this year's third quarter, compared with
adjusted operating profit of $7.7 million for the prior year's third quarter.
The decline in adjusted operating profit compared to the third quarter of
fiscal 2013 was primarily attributed to an $11.2 million unfavorable change in
pre-tax LIFO associated with our U.S.-based trading divisions, from pre-tax
LIFO income of $6.7 million in the third quarter of fiscal 2013 to pre-tax
LIFO expense of $4.5 million in the third quarter of fiscal 2014.
Additionally, our U.S.-based trading divisions experienced an increase in
metal margins, which partially offset the unfavorable change in pre-tax LIFO.

Year to Date Results
Net earnings attributable to CMC for the nine months ended May 31, 2014 were
$80.6 million ($0.68 per diluted share) on net sales of $5.1 billion, compared
with net earnings attributable to CMC of $73.3 million ($0.62 per diluted
share) on net sales of $5.2 billion for the nine months ended May 31, 2013.
Results for the nine months ended May 31, 2014 included an after-tax gain of
$15.5 million ($0.13 per diluted share) associated with the sale of the
Company's wholly owned copper tube manufacturing operation, Howell Metal
Company, and an after-tax charge of approximately $3 million ($0.03 per
diluted share) incurred in connection with the Company's final settlement of
the Standard Iron Works v. Arcelor Mittal et al. lawsuit. Results for the nine
months ended May 31, 2013 included an after-tax gain of $17.0 million ($0.14
per diluted share) associated with the sale of the Company's 11% ownership
interest in Trinecke Zelezarny, a.s., a Czech Republic joint-stock company.
The Company recorded after-tax LIFO expense of $9.7 million ($0.08 per diluted
share) for the nine months ended May 31, 2014, compared with after-tax LIFO
income of $26.1 million ($0.22 per diluted share) for the nine months ended
May 31, 2013. For the nine months ended May 31, 2014, adjusted operating
profit was $182.4 million, compared with $173.0 million for the nine months
ended May 31, 2013. Adjusted EBITDA was $282.2 million for the nine months
ended May 31, 2014, compared with $275.5 million for the nine months ended May
31, 2013.

Outlook
Alvarado concluded, "We anticipate that our operational results for the fourth
quarter of fiscal 2014 will remain consistent with our third quarter of fiscal
2014 results. The American Institute of Architects Architecture Billings Index
(ABI) for May rose a full three points over April to 52.6, indicating positive
directional growth in the U.S. construction markets. On the rebar import
front, we saw a slow-down from Mexico during the third quarter of fiscal 2014,
and we plan to continue monitoring the volume of rebar imports from Turkey and
other European and Asian countries until the pending countervailing and
anti-dumping decisions are finalized by the U.S. Commerce Department, which we
expect to take place in the latter part of 2014. As a result of the new
electric arc furnace that our Polish operations successfully commissioned
during the third quarter of fiscal 2014, we anticipate that our International
Mill segment will begin to benefit from productivity and cost improvements in
fiscal 2015."

Conference Call
CMC invites you to listen to a live broadcast of its third quarter of fiscal
2014 conference call today, Friday, June27, 2014, at 11:00 a.m. ET. Joe
Alvarado, Chairman of the Board, President and CEO, and Barbara Smith, 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 presented in
the webcast will be 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 steel minimills, 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 the Company's
expectations relating to the Company's future results, economic conditions and
the Company's operating plans. 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" 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, the Company
undertakes no obligation to update, amend or clarify any forward-looking
statements to reflect events, new information or otherwise.

Actual results may differ materially from those projected as a result of
certain risks and uncertainties, including, but not limited to, the following:
absence of global economic recovery or possible recession relapse and the pace
of overall global economic activity and its impact on a highly cyclical
industry; construction activity or lack thereof; decisions by governments
affecting the level of steel imports; difficulties or delays in the execution
of construction contracts, resulting in cost overruns or contract disputes;
metals pricing over which the Company exerts little influence; increased
capacity and product availability from competing steel minimills and other
steel suppliers, including import quantities and pricing; execution of cost
reduction strategies; industry consolidation or changes in production
capacity or utilization; currency fluctuations; availability and pricing of
raw materials over which we exert little influence, including scrap metal,
energy, insurance and supply prices; passage of new, or interpretation of
existing, environmental laws and regulations; and those factors listed under
Item 1A "Risk Factors" included in our Annual Report on Form 10-K for the
fiscal year ended August31, 2013.

COMMERCIAL METALS COMPANY
OPERATING STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)
                         Three Months Ended May 31,  Nine Months Ended May 31,
(short tons in           2014            2013        2014            2013
thousands)
Americas Recycling tons  596             588         1,728           1,724
shipped
Americas Steel Mills     424             369         1,155           1,066
rebar shipments
Americas Steel Mills
structural and other     310             271         886             842
shipments
Total Americas Steel     734             640         2,041           1,908
Mills tons shipped
Americas Steel Mills
average FOB selling      $   683         $   671     $   672         $  674
price (total sales)
Americas Steel Mills
average cost ferrous     $   349         $   352     $   350         $  347
scrap consumed
Americas Steel Mills     $   334         $   319     $   322         $  327
metal margin
Americas Steel Mills
average ferrous scrap    $   275         $   306     $   298         $  302
purchase price
International Mill tons  322             325         953             947
shipped
International Mill
average FOB selling      $   610         $   582     $   613         $  596
price (total sales)
International Mill
average cost ferrous     $   345         $   348     $   357         $  369
scrap consumed
International Mill       $   265         $   234     $   256         $  227
metal margin
International Mill
average ferrous scrap    $   287         $   277     $   303         $  299
purchase price
Americas Fabrication     266             234         703             663
rebar tons shipped
Americas Fabrication
structural and post      44              43          114             115
tons shipped
Total Americas
Fabrication tons         310             277         817             778
shipped
Americas Fabrication
average selling price    $   921         $   946     $   924         $  945
(excluding stock and
buyout sales)



(in thousands)          Three Months Ended May 31,  Nine Months Ended May 31,
Net sales               2014          2013          2014          2013
Americas Recycling      $ 335,104     $ 341,743     $ 1,015,574   $ 1,045,078
Americas Mills          527,574       461,772       1,465,574     1,354,087
Americas Fabrication    409,425       383,800       1,093,533     1,058,358
International Mill      207,558       200,752       618,070       602,584
International
Marketing and           604,045       593,804       1,687,010     1,852,328
Distribution
Corporate               193           3,888         11,544        10,348
Eliminations            (279,125)     (233,217)     (754,542)     (732,069)
Total net sales         $ 1,804,774   $ 1,752,542   $ 5,136,763   $ 5,190,714
Adjusted operating profit (loss)
Americas Recycling      $ (1,085)     $ 3,155       $ (1,109)     $ 9,892
Americas Mills          74,063        46,556        183,939       145,902
Americas Fabrication    1,244         13,499        (1,869)       19,879
International Mill      2,047         (3,831)       25,647        (7,108)
International
Marketing and           1,548         7,728         4,544         51,837
Distribution
Corporate               (18,227)      (14,834)      (51,340)      (51,398)
Eliminations            (1,930)       2,524         88            780
Adjusted operating
profit from continuing  57,660        54,797        159,900       169,784
operations
Adjusted operating
profit (loss) from      (417)         956           22,529        3,243
discontinued
operations
Adjusted operating      $ 57,243      $ 55,753      $ 182,429     $ 173,027
profit



COMMERCIAL METALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                        Three Months Ended May 31,  Nine Months Ended May 31,
(in thousands, except   2014          2013          2014          2013
share data)
Net sales               $ 1,804,774   $ 1,752,542   $ 5,136,763   $ 5,190,714
Costs and expenses:
Cost of goods sold      1,621,476     1,577,024     4,627,182     4,689,165
Selling, general and
administrative          126,756       121,731       352,305       360,975
expenses
Interest expense        18,999        18,043        57,756        51,557
Gain on sale of cost    —             —             —             (26,088)
method investment
                        1,767,231     1,716,798     5,037,243     5,075,609
Earningsfrom
continuing operations   37,543        35,744        99,520        115,105
before income taxes
Income taxes            13,700        17,379        32,657        43,876
Earningsfrom           23,843        18,365        66,863        71,229
continuing operations
Earnings (loss) from
discontinued            (417)         956           22,529        3,243
operations before
income taxes
Income taxes            (137)         358           8,766         1,213
Earnings (loss) from
discontinued            (280)         598           13,763        2,030
operations
Net earnings            23,563        18,963        80,626        73,259
Less net earnings
(loss)attributable to  —             (1)           1             1
noncontrolling
interests
Net
earningsattributable   $ 23,563      $ 18,964      $ 80,625      $ 73,258
to CMC
Basic earnings per share
attributable to CMC:
Earnings from           $ 0.20        $ 0.16        $ 0.57        $ 0.61
continuing operations
Earnings from
discontinued            —             —             0.12          0.02
operations
Net earnings            $ 0.20        $ 0.16        $ 0.69        $ 0.63
Diluted earnings per share
attributable to CMC:
Earnings from           $ 0.20        $ 0.16        $ 0.56        $ 0.60
continuing operations
Earnings from
discontinued            —             —             0.12          0.02
operations
Net earnings            $ 0.20        $ 0.16        $ 0.68        $ 0.62
Cash dividends per      $ 0.12        $ 0.12        $ 0.36        $ 0.36
share
Average basic shares    117,705,133   116,845,542   117,400,198   116,589,382
outstanding
Average diluted shares  118,769,675   117,703,590   118,521,816   117,456,756
outstanding



COMMERCIAL METALS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)                                   May 31, 2014  August 31,2013
Assets
Current assets:
Cash and cash equivalents                        $ 437,210     $  378,770
Accounts receivable, net                         946,675       989,694
Inventories, net                                 944,786       757,417
Other                                            169,340       240,314
Total current assets                             2,498,011     2,366,195
Net property, plant and equipment                931,744       940,237
Goodwill                                         69,786        69,579
Other assets                                     118,928       118,790
Total assets                                     $ 3,618,469   $  3,494,801
Liabilities and stockholders' equity
Current liabilities:
Accounts payable-trade                           $ 392,706     $  342,678
Accounts payable-documentary letters of credit   116,189       112,281
Accrued expenses and other payables              297,940       314,949
Notes payable                                    4,640         5,973
Current maturities of long-term debt             7,147         5,228
Total current liabilities                        818,622       781,109
Deferred income taxes                            56,727        46,558
Other long-term liabilities                      115,745       118,165
Long-term debt                                   1,276,729     1,278,814
Total liabilities                                2,267,823     2,224,646
Stockholders' equity attributable to CMC         1,350,557     1,269,999
Stockholders' equity attributable to             89            156
noncontrolling interests
Total stockholders' equity                       1,350,646     1,270,155
Total liabilities and stockholders' equity       $ 3,618,469   $  3,494,801



COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                     Nine Months Ended May 31,
(in thousands)                                       2014           2013
Cash flows from (used by) operating activities:
Net earnings                                         $  80,626      $ 73,259
Adjustments to reconcile net earnings to cash flows
from (used by) operating activities:
Depreciation and amortization                        101,130        102,164
Provision for losses on receivables, net             (1,705)        3,349
Share-based compensation                             16,054         13,528
Amortization of interest rate swaps termination      (5,698)        (8,723)
gain
Loss on debt extinguishment                          —              1,502
Deferred income taxes                                28,560         44,371
Tax benefits from stock plans                        (625)          (6)
Net gainon sale of a subsidiary, cost method        (28,032)       (25,999)
investment and other
Asset impairment                                     1,227          3,434
Changes in operating assets and liabilities:
Accounts receivable                                  (59,479)       (12,189)
Accounts receivable sold, net                        124,415        (2,292)
Inventories                                          (176,766)      (30,011)
Other assets                                         (18,486)       5,128
Accounts payable, accrued expenses and other         38,328         (122,482)
payables
Other long-term liabilities                          (5,244)        (1,962)
Net cash flows from operating activities             94,305         43,071
Cash flows from (used by) investing activities:
Capital expenditures                                 (67,718)       (63,008)
Proceeds from the sale of property, plant and        6,773          11,164
equipment and other
Proceeds from the sale of a subsidiary               52,276         —
Proceeds from the sale of cost method investment     —              28,995
Net cash flows used by investing activities          (8,669)        (22,849)
Cash flows from (used by) financing activities:
Increase (decrease) in documentary letters of        2,985          (25,153)
credit, net
Short-term borrowings, net change                    (1,333)        (25,595)
Repayments on long-term debt                         (4,826)        (63,442)
Payments for debt issuance costs                     (430)          (4,125)
Decrease in restricted cash                          18,037         —
Stock issued under incentive and purchase plans,     (860)          1,347
net of forfeitures
Proceeds from issuance of long-term debt             —              330,000
Debt extinguishment costs                            —              (1,502)
Cash dividends                                       (42,290)       (41,990)
Tax benefits from stock plans                        625            6
Contribution from (purchase of) noncontrolling       (37)           13
interests
Net cash flows from (used by) financing activities   (28,129)       169,559
Effect of exchange rate changes on cash              933            1,066
Increase in cash and cash equivalents                58,440         190,847
Cash and cash equivalents at beginning of year       378,770        262,422
Cash and cash equivalents at end of period           $  437,210     $ 453,269

COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(dollars in thousands)

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 is a non-GAAP financial measure. Management uses
adjusted operating profit to evaluate the financial performance of the
Company. Adjusted operating profit is the sum of our earnings from continuing
operations before income taxes, interest expense and discounts on sales of
accounts receivable. For added flexibility, we may sell certain accounts
receivable both in the U.S. and internationally. We consider sales of
receivables as an alternative source of liquidity to finance our operations
and we believe that removing these costs provides a clearer perspective of the
Company's operating performance. Adjusted operating profit may be inconsistent
with similar measures presented by other companies.

                         Three Months Ended May 31,  Nine Months Ended May 31,
(in thousands)           2014           2013         2014           2013
Earningsfrom            $  23,843      $  18,365    $  66,863      $ 71,229
continuing operations
Income taxes             13,700         17,379       32,657         43,876
Interest expense         18,999         18,043       57,756         51,557
Discounts on sales of    1,118          1,010        2,624          3,122
accounts receivable
Adjusted operating       57,660         54,797       159,900        169,784
profit
Adjusted operating
profit (loss) from       (417)          956          22,529         3,243
discontinued operations
Adjusted operating       $  57,243      $  55,753    $  182,429     $ 173,027
profit

Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is the sum
of our earnings from continuing operations before net earnings attributable to
noncontrolling interests, outside financing costs and income taxes. It also
excludes the Company's largest recurring non-cash charge, depreciation and
amortization, as well as impairment charges, which are also non-cash. Adjusted
EBITDA should not be considered as an alternative to net earnings or as a
better measure of liquidity than net cash flows from operating activities, as
determined by GAAP. However, we believe that adjusted EBITDA provides relevant
and useful information, which is often used by analysts, creditors, and other
interested parties in our industry. Adjusted EBITDA to interest expense is a
covenant test in certain of the Company's debt agreements. Adjusted EBITDA is
also the target benchmark for our annual and long-term cash incentive
performance plans for management. Adjusted EBITDA may be inconsistent with
similar measures presented by other companies.

                         Three Months Ended May 31,  Nine Months Ended May 31,
(in thousands)           2014           2013         2014           2013
Earningsfrom            $  23,843      $  18,365    $  66,863      $ 71,229
continuing operations
Net (earnings) loss
attributable to          —              1            (1)            (1)
noncontrolling
interests
Interest expense         18,999         18,043       57,756         51,557
Income taxes             13,700         17,379       32,657         43,876
Depreciation and         33,846         33,426       101,130        100,029
amortization
Impairment charges       —              406          902            3,434
Adjusted EBITDA from     90,388         87,620       259,307        270,124
continuing operations
Adjusted EBITDA from     (417)          1,657        22,854         5,378
discontinued operations
Adjusted EBITDA          $  89,971      $  89,277    $  282,161     $ 275,502

Adjusted EBITDA to interest expense for the quarter ended May31, 2014:

$89,971 / $18,999 = 4.7

Total Capitalization:
Total capitalization is the sum of stockholders' equity attributable to CMC,
long-term debt and deferred income taxes. The ratio of debt to total
capitalization is a measure of current debt leverage. The following reconciles
total capitalization to the most comparable GAAP measure, stockholders' equity
attributable to CMC:

(in thousands)                            May 31, 2014
Stockholders' equity attributable to CMC
                                         $  1,350,557
Long-term debt                            1,276,729
Deferred income taxes                     56,727
Total capitalization                      $  2,684,013

OTHER FINANCIAL INFORMATION
Long-term debt to capitalization ratio as of May31, 2014:

$1,276,729 / $2,684,013 = 47.6%

Total debt to capitalization plus short-term debt plus notes payable ratio as
of May31, 2014:

( $1,276,729 + $7,147 + $4,640 ) / ( $2,684,013 + $7,147 + $4,640 ) = 47.8%

Current ratio as of May31, 2014:

Current assets divided by current liabilities

$2,498,011 / $818,622 = 3.1

SOURCE Commercial Metals Company

Website: http://www.cmc.com
Contact: Barbara Smith, Senior Vice President and CFO, 214.689.4300
 
Press spacebar to pause and continue. Press esc to stop.