defa14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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COMMERCIAL METALS COMPANY
(Name of Registrant as Specified In Its Charter)
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COMMERCIAL METALS COMPANY REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
Irving, TX October 28, 2011 Commercial Metals Company (NYSE: CMC) today reported a net
loss of $120.3 million or $1.04 per diluted share on net sales of $2.3 billion for the fourth
quarter ended August 31, 2011. This compares with net earnings of $8.0 million or $0.07 per
diluted share on net sales of $1.8 billion for the same period in 2010. In the fourth quarter of
2011, CMC recorded pre-tax restructuring charges, including impairments, of approximately $144
million related to the Companys decision to exit its Sisak mill in Croatia and to close five rebar
fabrication locations, including four domestic and one international location, as well as eight
construction services (CRP) locations. Excluding these restructuring charges, adjusted profit
before tax for the fourth quarter of 2011 was $31.3 million, a loss before tax of $112.3 million including
restructuring charges, compared with adjusted profit before tax of $11.5 million for the last
years fourth quarter. The fourth quarter of 2011 also included after-tax LIFO expense of $6.3
million or $0.05 per diluted share compared with income of $23.4 million or $0.20 per diluted share
in last years fourth quarter.
Net loss for the year ended August 31, 2011 was $129.6 million or $1.13 per diluted share on
net sales of $7.9 billion. For the full-year 2010, the Company had a net loss of $205.3 million or
$1.81 per diluted share on net sales of $6.3 billion. Excluding the aforementioned restructuring
charges, adjusted profit before tax was $30.5 million for 2011, a loss before taxes of $113.1
million including restructuring charges. For the year ended August 31, 2011, after-tax LIFO
expense was $50.0 million or $0.44 per diluted share compared with LIFO income of $7.4 million or
$0.07 per diluted share for the same period last year.
Cash and short-term investments totaled $222 million as of August 31, 2011. There were no
outstanding borrowings against the $400 million revolving credit facility. Coverage ratio tests on
the Companys unused revolver and public debt were met. The board declared a quarterly dividend of
$0.12 per share on October 7, for shareholders of record on October 18, 2011.
Joe Alvarado, President and Chief Executive Officer, said, We achieved another profitable
quarter, excluding special restructuring charges for the exit of our Croatian operation and other
initiatives. These results were driven in part by relatively stable prices and demand, which
contributed to greater overall predictability in our operations. Although the environment in the
metals industry remains challenging, we continue to take important steps to focus on our core
business, strengthen our competitive position and serve our customers in a more effective manner,
all of which will help improve performance and position the Company for the future.
The approximately $144 million of restructuring charges recorded in the fourth quarter of 2011
included: asset impairment charges of $120 million, inventory charges of $9 million, severance
charges of $5 million and other closure costs of $10 million.
The Americas Recycling, Americas Mills and International Marketing and Distribution segments
as well as the Companys Polish mill (CMCZ), within our International Mills segment, were
profitable for the fourth quarter of 2011. The 2011 fourth quarter sales and adjusted operating
profit for these operations were greater than in the fourth quarter of 2010, with the exception of
CMCZ which had a minimal decline in adjusted operating profit. Americas Recycling had an adjusted
(CMC Year End 2011 Page 2)
operating profit of $10.8 million, an increase of $5.6 million, due to higher average selling
prices and tons for both ferrous and
nonferrous shipments. Americas Mills increased adjusted operating profit $5.0 million to $45.6
million driven by improved volumes as the Companys shipments were the highest of any quarter since
the fourth quarter of 2008, driven by seasonal pickups and continued strength in certain regional
markets. CMCZ held steady with an adjusted operating profit of $14.6 million, its sixth
consecutive quarterly adjusted operating profit. CMCZ benefited from a continued strong Polish
economy and improvements in product mix from the Companys new flexible rolling mill. On a year
over year comparison, the Americas Recycling segments 2011 adjusted operating profit increased by
$31.6 million, compared to the full year 2010. The Americas Mills segments 2011 adjusted
operating profit increased $124.5 million compared to 2010, and CMCZs 2011 adjusted operating
profit increased $79.2 million over 2010.
The International Marketing and Distribution segment remained profitable in the fourth
quarter, as it has for each of the last nine quarters. The segment achieved adjusted operating
profit of $22.7 million compared to $12.5 million in fourth quarter 2010. Each of its major
geographic marketing operations were profitable this quarter, led by the raw materials marketing
operations. Additionally, the Companys domestic steel import business continued to improve with
another solid quarter. Overall, the Companys Australian operations were profitable but its
Australian distribution operation was impacted by weakness in Australias economy. During the
fourth quarter of 2011, CMC completed the purchase of G.A.M. Steel Pty. Ltd. (G.A.M.), based in
Melbourne, Australia. G.A.M. is a leading distributor and processor of steel long products and
plate, servicing the structural fabrication, rural and manufacturing segments in the state of
Victoria, Australia. The acquisition of G.A.M. will complement CMCs existing national long
products distribution investments in Australia.
The Americas Fabrication segment continues to be affected by an overall difficult market for
fabricated steel. The segment reported an adjusted operating loss of $42.8 million, including the
previously discussed restructuring charges of $21.7 million. Tonnages and selling prices
increased, but an $8.3 million unfavorable swing in LIFO expense made it difficult to improve on
the fourth quarter 2010 adjusted operating loss of $17.1 million.
CMCS had an adjusted operating loss of $115.1 million, including the previously discussed
restructuring charges of $110.6. The Company will be incurring severance and closure costs in 2012
but has forecast that the liquidation of working capital and the cash tax savings will minimize the
cash flow impact of these restructuring costs.
Outlook
Alvarado concluded, Our backlog remains at levels comparable to last quarter and were
pleased to see pricing in the backlog continuing to improve. In the first quarter of 2012, we
expect a slowdown in operations, typical with this time of year as we begin to enter the winter
months at such businesses as CMCZ. As a result of this seasonally weaker first quarter and the
costs associated with our exit from the Croatian steel pipe business, we expect to incur a loss
before tax from operations; however, expected tax benefits related to CMCS will give us after tax
profitability in the first quarter of 2012. Importantly, we remain encouraged as we continue to
make progress in reducing our cost structure, improving operations and enhancing cash flows.
(CMC Year End 2011 Page 3)
Conference Call
CMC invites you to listen to a live broadcast of its fourth quarter 2011 conference call
today, Friday,
October 28, 2011, at 11:00 a.m. ET. The call will be hosted by Joe Alvarado, President and CEO,
and Barbara Smith, Senior Vice President and CFO, and can be accessed via our website at
www.cmc.com or at www.streetevents.com. In the event you are unable to listen to
the live broadcast, the call will be archived and available for replay on the webcast on the next
business day. Financial and statistical information presented in the broadcast can be found on
CMCs website under Investor Relations.
Commercial Metals Company and 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, a copper tube mill,
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 outlook for the Companys
financial results including net earnings (loss), economic conditions, credit availability, product
pricing and demand, currency valuation, production rates, energy expense, interest rates, inventory
levels, acquisitions, construction and operation of new facilities and general market conditions.
These forward-looking statements can generally be identified by phrases such as we, the company or
its management expects, anticipates, believes, estimates, intends, plans to, ought,
could, will, should, likely, appears, projects, forecasts, outlook, or other
similar words or phrases. There are inherent risks and uncertainties in any forward-looking
statements. Variances will occur and some could be materially different from our current
expectations.
Developments that could impact the Companys expectations include the following: absence of
global economic recovery or possible recession relapse; solvency of financial institutions and
their ability or willingness to lend; success or failure of governmental efforts to stimulate the
economy, including restoring credit availability and confidence in a recovery; continued sovereign
debt problems in Greece and other countries within the euro zone and other foreign zones; customer
non-compliance with contracts; construction activity; decisions by governments affecting the level
of steel imports, including tariffs and duties; litigation claims and settlements; difficulties or
delays in the execution of construction contracts resulting in cost overruns or contract disputes;
unsuccessful implementation of new technology; 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 minimization
strategies; ability to retain key executives; court decisions; industry consolidation or changes in
production capacity or utilization; global factors, including political and military uncertainties;
currency fluctuations; interest rate changes; energy, insurance and supply prices; severe weather,
especially in Poland; and the pace of overall economic activity, particularly in China.
(CMC Year End 2011 Page 4)
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Three months ended |
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Fiscal year ended |
(Short Tons in Thousands) |
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8/31/11 |
|
8/31/10 |
|
8/31/11 |
|
8/31/10 |
Americas Steel Mill Rebar Shipments |
|
|
367 |
|
|
|
311 |
|
|
|
1,280 |
|
|
|
1,125 |
|
Americas Steel Mill Structural and Other Shipments |
|
|
336 |
|
|
|
238 |
|
|
|
1,238 |
|
|
|
1,031 |
|
CMCZ Shipments |
|
|
399 |
|
|
|
387 |
|
|
|
1,494 |
|
|
|
1,387 |
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Total Mill Tons Shipped |
|
|
1,102 |
|
|
|
936 |
|
|
|
4,012 |
|
|
|
3,543 |
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Americas Steel Mill Average FOB Selling Price (Total Sales) |
|
$ |
697 |
|
|
$ |
602 |
|
|
$ |
669 |
|
|
$ |
563 |
|
Americas Steel Mill Average Cost Ferrous Scrap Utilized |
|
$ |
383 |
|
|
$ |
292 |
|
|
$ |
364 |
|
|
$ |
292 |
|
Americas Steel Mill Metal Margin |
|
$ |
314 |
|
|
$ |
310 |
|
|
$ |
305 |
|
|
$ |
271 |
|
Americas Steel Mill Average Ferrous Scrap Purchase Price |
|
$ |
352 |
|
|
$ |
260 |
|
|
$ |
329 |
|
|
$ |
259 |
|
CMCZ Mill Average FOB Selling Price (Total Sales) |
|
$ |
679 |
|
|
$ |
496 |
|
|
$ |
638 |
|
|
$ |
461 |
|
CMCZ Mill Average Cost Ferrous Scrap Utilized |
|
$ |
413 |
|
|
$ |
290 |
|
|
$ |
389 |
|
|
$ |
295 |
|
CMCZ Mill Metal Margin |
|
$ |
266 |
|
|
$ |
206 |
|
|
$ |
249 |
|
|
$ |
166 |
|
CMCZ Mill Average Ferrous Scrap Purchase Price |
|
$ |
349 |
|
|
$ |
241 |
|
|
$ |
325 |
|
|
$ |
244 |
|
|
Americas Fabrication Rebar Shipments |
|
|
244 |
|
|
|
239 |
|
|
|
851 |
|
|
|
830 |
|
Americas Fabrication Structural and Post Shipments |
|
|
35 |
|
|
|
33 |
|
|
|
155 |
|
|
|
149 |
|
|
|
|
Total Americas Fabrication Tons Shipped |
|
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279 |
|
|
|
272 |
|
|
|
1,006 |
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979 |
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Americas Fabrication Avg. Selling Price (Excluding Stock
and Buyout Sales) |
|
$ |
866 |
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|
$ |
778 |
|
|
$ |
817 |
|
|
$ |
768 |
|
|
|
|
|
|
|
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|
|
|
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|
|
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|
Americas Recycling Tons Shipped |
|
|
714 |
|
|
|
554 |
|
|
|
2,469 |
|
|
|
2,138 |
|
BUSINESS SEGMENTS
(in thousands)
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Three months ended |
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Fiscal year ended |
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8/31/11 |
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8/31/10 |
|
8/31/11 |
|
8/31/10 |
Net Sales |
|
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|
|
|
|
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|
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|
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Americas Recycling |
|
$ |
523,404 |
|
|
$ |
362,222 |
|
|
$ |
1,829,537 |
|
|
$ |
1,316,430 |
|
Americas Mills |
|
|
576,992 |
|
|
|
404,870 |
|
|
|
2,036,325 |
|
|
|
1,478,426 |
|
Americas Fabrication |
|
|
357,549 |
|
|
|
319,427 |
|
|
|
1,225,722 |
|
|
|
1,140,277 |
|
International Mills |
|
|
342,230 |
|
|
|
231,758 |
|
|
|
1,140,545 |
|
|
|
763,978 |
|
International Marketing and Distribution |
|
|
735,891 |
|
|
|
720,024 |
|
|
|
2,650,899 |
|
|
|
2,463,414 |
|
Corporate and Eliminations |
|
|
(268,446 |
) |
|
|
(222,054 |
) |
|
|
(964,598 |
) |
|
|
(856,423 |
) |
|
Total Net Sales |
|
$ |
2,267,620 |
|
|
$ |
1,816,247 |
|
|
$ |
7,918,430 |
|
|
$ |
6,306,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Adjusted Operating Profit (Loss): |
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|
|
|
|
|
|
|
|
|
|
|
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|
|
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Americas Recycling |
|
$ |
10,808 |
|
|
$ |
5,220 |
|
|
$ |
43,059 |
|
|
$ |
11,416 |
|
Americas Mills |
|
|
45,593 |
|
|
|
40,586 |
|
|
|
161,731 |
|
|
|
37,251 |
|
Americas Fabrication |
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|
(42,830 |
) |
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|
(17,115 |
) |
|
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(129,141 |
) |
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(107,800 |
) |
International Mills |
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|
(100,537 |
) |
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|
10,889 |
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|
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(100,125 |
) |
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(73,484 |
) |
International Marketing and Distribution |
|
|
22,749 |
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|
|
12,531 |
|
|
|
76,337 |
|
|
|
74,689 |
|
Corporate and Eliminations |
|
|
(28,412 |
) |
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|
(27,143 |
) |
|
|
(86,004 |
) |
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|
(67,218 |
) |
(CMC Year End 2011 Page 5)
COMMERCIAL METALS COMPANY
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands except share and per share data)
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Three months ended |
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Fiscal year ended |
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8/31/11 |
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8/31/10 |
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8/31/11 |
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8/31/10 |
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Net Sales |
|
$ |
2,267,620 |
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|
$ |
1,816,247 |
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|
$ |
7,918,430 |
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|
$ |
6,306,102 |
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Costs and Expenses: |
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Cost of Goods Sold |
|
|
2,096,618 |
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|
|
1,657,491 |
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|
|
7,301,815 |
|
|
|
5,911,065 |
|
Selling, General and Administrative Expenses |
|
|
146,341 |
|
|
|
132,525 |
|
|
|
537,113 |
|
|
|
520,369 |
|
Impairment of Assets |
|
|
118,795 |
|
|
|
2,428 |
|
|
|
118,795 |
|
|
|
3,766 |
|
Interest Expense |
|
|
15,949 |
|
|
|
17,637 |
|
|
|
70,806 |
|
|
|
75,508 |
|
|
|
|
|
2,377,703 |
|
|
|
1,810,081 |
|
|
|
8,028,529 |
|
|
|
6,510,708 |
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from Continuing Operations Before Taxes |
|
|
(110,083 |
) |
|
|
6,166 |
|
|
|
(110,099 |
) |
|
|
(204,606 |
) |
Income Taxes (Benefit) |
|
|
10,640 |
|
|
|
(2,017 |
) |
|
|
19,328 |
|
|
|
(38,118 |
) |
|
Earnings (Loss) from Continuing Operations |
|
|
(120,723 |
) |
|
|
8,183 |
|
|
|
(129,427 |
) |
|
|
(166,488 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from Discontinued Operations Before Taxes |
|
|
(2,183 |
) |
|
|
2,751 |
|
|
|
(2,965 |
) |
|
|
(59,762 |
) |
Income Taxes (Benefit) |
|
|
(2,685 |
) |
|
|
2,975 |
|
|
|
(2,988 |
) |
|
|
(21,142 |
) |
|
Earnings (Loss) from Discontinued Operations |
|
|
502 |
|
|
|
(224 |
) |
|
|
23 |
|
|
|
(38,620 |
) |
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Net Earnings (Loss) |
|
|
(120,221 |
) |
|
|
7,959 |
|
|
|
(129,404 |
) |
|
|
(205,108 |
) |
Less Net Earnings Attributable to Noncontrolling Interests |
|
|
50 |
|
|
|
(42 |
) |
|
|
213 |
|
|
|
236 |
|
Net Earnings (Loss) Attributable to CMC |
|
$ |
(120,271 |
) |
|
$ |
8,001 |
|
|
$ |
(129,617 |
) |
|
$ |
(205,344 |
) |
|
|
|
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|
|
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|
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Basic Earnings (Loss) per Share Attributable to CMC |
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|
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|
|
|
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|
|
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|
|
|
Earnings (Loss) from Continuing Operations |
|
$ |
(1.04 |
) |
|
$ |
0.07 |
|
|
$ |
(1.13 |
) |
|
$ |
(1.47 |
) |
Earnings (Loss) from Discontinued Operations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(0.34 |
) |
|
Net Earnings (Loss) |
|
$ |
(1.04 |
) |
|
$ |
0.07 |
|
|
$ |
(1.13 |
) |
|
$ |
(1.81 |
) |
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Diluted Earnings (Loss) per Share Attributable to CMC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) from Continuing Operations |
|
$ |
(1.04 |
) |
|
$ |
0.07 |
|
|
$ |
(1.13 |
) |
|
$ |
(1.47 |
) |
Earnings (Loss) from Discontinued Operations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(0.34 |
) |
|
Net Earnings (Loss) |
|
$ |
(1.04 |
) |
|
$ |
0.07 |
|
|
$ |
(1.13 |
) |
|
$ |
(1.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends per Share |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Basic Shares Outstanding |
|
|
115,523,088 |
|
|
|
114,261,440 |
|
|
|
114,995,616 |
|
|
|
113,524,836 |
|
Average Diluted Shares Outstanding |
|
|
115,523,088 |
|
|
|
114,946,453 |
|
|
|
114,995,616 |
|
|
|
113,524,836 |
|
(CMC Year End 2011 Page 6)
COMMERCIAL METALS COMPANY
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
August 31, |
|
|
August 31, |
|
|
|
2011 |
|
|
2010 |
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
222,390 |
|
|
$ |
399,313 |
|
Accounts receivable, net |
|
|
956,852 |
|
|
|
824,339 |
|
Inventories |
|
|
908,338 |
|
|
|
674,680 |
|
Other |
|
|
238,673 |
|
|
|
276,874 |
|
|
Total Current Assets |
|
|
2,326,253 |
|
|
|
2,175,206 |
|
|
|
|
|
|
|
|
|
|
Net Property, Plant and Equipment |
|
|
1,112,015 |
|
|
|
1,232,268 |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
77,638 |
|
|
|
71,580 |
|
|
|
|
|
|
|
|
|
|
Other Assets |
|
|
167,225 |
|
|
|
227,099 |
|
|
|
|
$ |
3,683,131 |
|
|
$ |
3,706,153 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity: |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable trade |
|
$ |
585,289 |
|
|
$ |
504,388 |
|
Accounts payable documentary letters of credit |
|
|
170,683 |
|
|
|
226,633 |
|
Accrued expenses and other payables |
|
|
377,774 |
|
|
|
324,897 |
|
Notes payable |
|
|
6,200 |
|
|
|
6,453 |
|
Commercial paper |
|
|
|
|
|
|
10,000 |
|
Current maturities of long-term debt |
|
|
58,908 |
|
|
|
30,588 |
|
|
Total Current Liabilities |
|
|
1,198,854 |
|
|
|
1,102,959 |
|
|
|
|
|
|
|
|
|
|
Deferred Income Taxes |
|
|
49,572 |
|
|
|
43,668 |
|
Other Long-Term Liabilities |
|
|
106,560 |
|
|
|
108,870 |
|
Long-Term Debt |
|
|
1,167,497 |
|
|
|
1,197,282 |
|
|
|
|
|
|
|
|
|
|
Stockholders Equity Attributable to CMC |
|
|
1,160,425 |
|
|
|
1,250,736 |
|
Stockholders Equity Attributable to Noncontrolling Interests |
|
|
223 |
|
|
|
2,638 |
|
|
|
|
$ |
3,683,131 |
|
|
$ |
3,706,153 |
|
|
(CMC Year
End 2011 Page 7)
COMMERCIAL METALS COMPANY
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Fiscal year ended |
|
|
|
8/31/11 |
|
|
8/31/10 |
|
Cash Flows From (Used by) Operating Activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(129,404 |
) |
|
$ |
(205,108 |
) |
Adjustments to reconcile net loss to cash from operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
159,576 |
|
|
|
168,934 |
|
Provision for losses (recoveries) on receivables, net |
|
|
306 |
|
|
|
(2,582 |
) |
Share-based compensation |
|
|
12,893 |
|
|
|
13,132 |
|
Deferred income taxes |
|
|
(19,856 |
) |
|
|
59,286 |
|
Tax benefits from stock plans |
|
|
(2,355 |
) |
|
|
(4,033 |
) |
Gain on sale of assets and other |
|
|
(1,315 |
) |
|
|
(4,740 |
) |
Write-down of inventory |
|
|
25,503 |
|
|
|
53,203 |
|
Asset impairment |
|
|
120,145 |
|
|
|
35,041 |
|
|
|
|
|
|
|
|
|
|
Changes in Operating Assets and Liabilities, Net of Acquisitions: |
|
|
|
|
|
|
|
|
Increase in accounts receivable |
|
|
(168,779 |
) |
|
|
(106,402 |
) |
Accounts receivable sold, net |
|
|
78,297 |
|
|
|
10,239 |
|
Increase in inventories |
|
|
(200,204 |
) |
|
|
(60,612 |
) |
Decrease (increase) in other assets |
|
|
73,382 |
|
|
|
(94,313 |
) |
Increase in accounts payable, accrued expenses, other payables
and income taxes |
|
|
82,642 |
|
|
|
186,952 |
|
Decrease in other long-term liabilities |
|
|
(3,084 |
) |
|
|
(4,087 |
) |
|
Net Cash Flows From Operating Activities |
|
|
27,747 |
|
|
|
44,910 |
|
|
|
|
|
|
|
|
|
|
Cash Flows From (Used by) Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(73,215 |
) |
|
|
(127,121 |
) |
Proceeds from the sale of property, plant and equipment, and other |
|
|
53,394 |
|
|
|
22,887 |
|
Proceeds from the sale of equity method investments |
|
|
10,802 |
|
|
|
|
|
Acquisitions, net of cash acquired |
|
|
(48,386 |
) |
|
|
(2,448 |
) |
Increase in deposit for letters of credit |
|
|
(4,123 |
) |
|
|
(26,930 |
) |
|
Net Cash Flows Used By Investing Activities |
|
|
(61,528 |
) |
|
|
(133,612 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From (Used by) Financing Activities: |
|
|
|
|
|
|
|
|
Increase (decrease) in documentary letters of credit |
|
|
(55,950 |
) |
|
|
117,423 |
|
Short-term borrowings, net change |
|
|
(10,253 |
) |
|
|
14,636 |
|
Repayments on long-term debt |
|
|
(33,577 |
) |
|
|
(29,939 |
) |
Proceeds from issuance of long-term debt |
|
|
|
|
|
|
22,438 |
|
Stock issued under incentive and purchase plans |
|
|
9,615 |
|
|
|
10,494 |
|
Cash dividends |
|
|
(55,177 |
) |
|
|
(54,489 |
) |
Contribution from (purchase of) noncontrolling interests |
|
|
(4,027 |
) |
|
|
21 |
|
Tax benefits from stock plans |
|
|
2,355 |
|
|
|
4,033 |
|
|
Net Cash Flows From (Used By) Financing Activities |
|
|
(147,014 |
) |
|
|
84,617 |
|
|
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash |
|
|
3,872 |
|
|
|
(2,205 |
) |
|
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash Equivalents |
|
|
(176,923 |
) |
|
|
(6,290 |
) |
Cash and Cash Equivalents at Beginning of Year |
|
|
399,313 |
|
|
|
405,603 |
|
|
Cash and Cash Equivalents at End of Year |
|
$ |
222,390 |
|
|
$ |
399,313 |
|
|
(CMC Year
End 2011 Page 8)
COMMERCIAL METALS COMPANY
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands except per share data)
This press release uses financial statement measures not derived in accordance with generally
accepted accounting principles (GAAP). Reconciliations to the most comparable GAAP measures are
provided below.
Adjusted
Profit (Loss) Before Tax, Adjusted Net Earnings (Loss) and Adjusted Earnings (Loss) Per Share:
Adjusted
Profit (Loss) Before Tax, Adjusted Net Earnings (Loss) and Adjusted Earnings (Loss) Per Share are non-GAAP performance measurements. Management believes excluding
the restructuring charges listed below from the Companys financial results provides
investors with a clearer perspective of the current underlying operating performance of the
Company, a clearer comparison to current period results and greater transparency regarding
supplemental information used by management in its financial and operational decision making.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Fiscal year ended |
|
|
8/31/11 |
|
8/31/10 |
|
8/31/11 |
|
8/31/10 |
Earnings (loss) from continuing operations before taxes
|
|
$ |
(110,083 |
) |
|
$ |
6,166 |
|
|
$ |
(110,099 |
) |
|
$ |
(204,606 |
) |
Earnings (loss) from discontinued operations before taxes
|
|
|
(2,183 |
) |
|
|
2,751 |
|
|
|
(2,965 |
) |
|
|
(59,762 |
) |
|
|
|
Earnings (loss) before taxes
|
|
|
(112,266 |
) |
|
|
8,917 |
|
|
|
(113,064 |
) |
|
|
(264,368 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment charges
|
|
|
120,145 |
|
|
|
|
|
|
|
120,145 |
|
|
|
31,300 |
|
Write-down of inventory
|
|
|
8,500 |
|
|
|
|
|
|
|
8,500 |
|
|
|
7,400 |
|
Severance
|
|
|
5,051 |
|
|
|
2,600 |
|
|
|
5,051 |
|
|
|
11,700 |
|
Lease termination costs
|
|
|
2,196 |
|
|
|
|
|
|
|
2,196 |
|
|
|
|
|
Other closure costs
|
|
|
7,700 |
|
|
|
|
|
|
|
7,700 |
|
|
|
|
|
|
|
|
Adjusted profit (loss) before tax
|
|
|
31,326 |
|
|
|
11,517 |
|
|
|
30,528 |
|
|
|
(213,968 |
) |
|
Income taxes (benefit) on adjusted profit (loss) |
|
|
21,091 |
|
|
|
1,868 |
|
|
|
29,475 |
|
|
|
(41,620 |
) |
Less: Liability for non-U.S. earnings due to restructuring |
|
|
8,848 |
|
|
|
|
|
|
|
8,848 |
|
|
|
|
|
|
|
Adjusted income taxes (benefit) excluding restructuring charges |
|
|
12,243 |
|
|
|
1,868 |
|
|
|
20,627 |
|
|
|
(41,620 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings (loss) excluding restructuring charges |
|
$ |
19,083 |
|
|
$ |
9,649 |
|
|
$ |
9,901 |
|
|
$ |
(172,348 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings (loss) per share excluding restructuring charges |
|
$ |
0.17 |
|
|
$ |
0.08 |
|
|
$ |
0.09 |
|
|
$ |
(1.52 |
) |
The adjustments in the fourth quarter of 2011 relate to restructuring charges associated with the
Companys decision to exit our mill in Croatia and the closure of certain rebar fabrication and CRP
locations. The adjustments for 2010 relate to the Companys decision to exit the joist and
deck business in the second quarter of 2010.
Adjusted EBITDA and Adjusted EBITDA excluding restructuring charges:
Earnings before interest expense, income taxes, depreciation and amortization, and impairment
charges.
Adjusted EBITDA is a non-GAAP liquidity measure. It excludes Commercial Metals Companys largest
recurring non-cash charge, depreciation and amortization, including impairment charges. As a
measure of cash flow before interest expense, it is one guideline used to assess the Companys
ability to pay its current debt obligations as they mature and a tool to calculate possible future
levels of leverage capacity. Adjusted EBITDA to interest is a covenant test in certain of the
Companys note agreements.
Adjusted EBITDA excluding
restructuring charges
is used by management to measure liquidity capabilities and management believes it helps investors in the comparison
of underlying performance between periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Fiscal year ended |
|
|
|
8/31/11 |
|
|
8/31/10 |
|
|
8/31/11 |
|
|
8/31/10 |
|
Net earnings (loss) attributable to CMC |
|
$ |
(120,271 |
) |
|
$ |
8,001 |
|
|
$ |
(129,617 |
) |
|
$ |
(205,344 |
) |
Interest expense |
|
|
15,949 |
|
|
|
17,637 |
|
|
|
70,806 |
|
|
|
75,508 |
|
Income taxes |
|
|
7,955 |
|
|
|
958 |
|
|
|
16,340 |
|
|
|
(59,260 |
) |
Depreciation and impairment charges |
|
|
158,911 |
|
|
|
42,969 |
|
|
|
279,721 |
|
|
|
203,975 |
|
|
|
Adjusted EBITDA |
|
|
62,544 |
|
|
|
69,565 |
|
|
|
237,250 |
|
|
|
14,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-down of inventory |
|
|
8,500 |
|
|
|
|
|
|
|
8,500 |
|
|
|
7,400 |
|
Severance |
|
|
5,051 |
|
|
|
2,600 |
|
|
|
5,051 |
|
|
|
11,700 |
|
Lease termination costs |
|
|
2,196 |
|
|
|
|
|
|
|
2,196 |
|
|
|
|
|
Other closure costs |
|
|
7,700 |
|
|
|
|
|
|
|
7,700 |
|
|
|
|
|
|
|
Adjusted EBITDA excluding restructuring charges |
|
$ |
85,991 |
|
|
$ |
72,165 |
|
|
$ |
260,697 |
|
|
$ |
33,979 |
|
|
|
The adjustments in the fourth quarter of 2011 relate to restructuring charges associated with the
Companys decision to exit our mill in Croatia and the closure of certain rebar fabrication and CRP
locations. The adjustments for 2010 relate to the Companys decision to exit the joist and
deck business in the second quarter of 2010.
(CMC Year
End 2011 Page 9)
Adjusted EBITDA to interest coverage for the year ended August 31, 2011:
$237,250 / 70,806 = 3.4
Total Capitalization:
Total capitalization is the sum of long-term debt, deferred income taxes, and stockholders equity.
The ratio of debt to total capitalization is a measure of current debt leverage. The following
reconciles total capitalization at August 31, 2011 to the nearest GAAP measure, stockholders
equity:
|
|
|
|
|
Stockholders equity attributable to CMC
|
|
$ |
1,160,425 |
|
Long-term debt
|
|
|
1,167,497 |
|
Deferred income taxes
|
|
|
49,572 |
|
|
Total capitalization
|
|
$ |
2,377,494 |
|
Other Financial Information
Long-term debt to cap ratio as of August 31, 2011:
Debt divided by capitalization
$1,167,497 / 2,377,494 = 49.1%
Total debt to cap plus short-term debt plus notes payable ratio as of August 31, 2011:
($1,167,497 + 58,908 + 6,200) / (2,377,494 + 58,908 + 6,200) = 50.5%
Current ratio as of August 31, 2011:
Current assets divided by current liabilities
$2,326,253 / 1,198,854 = 1.9
|
Contact: |
|
Barbara Smith
Chief Financial Officer
214.689.4300 |
(CMC Year
End 2011 Page 10)
Important Additional Information
Commercial Metals Company (CMC), its directors and certain of its executive officers may be
deemed to be participants in the solicitation of proxies from CMC stockholders in connection with
the matters to be considered at CMCs 2012 annual meeting of stockholders. CMC intends to file a
proxy statement with the U.S. Securities and Exchange Commission (the SEC) in connection with any
such solicitation of proxies from CMC stockholders. CMC STOCKHOLDERS ARE STRONGLY ENCOURAGED TO
READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL
CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of CMCs directors and executive
officers in CMC stock, restricted stock and options is included in their SEC filings on Forms 3, 4
and 5, which can be found at the CMCs website (www.cmc.com) in the section Investor Relations.
More detailed information regarding the identity of potential participants, and their direct or
indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with CMCs 2012 annual meeting of
stockholders. Information can also be found in CMCs Annual Report on Form 10-K for the year ended
August 31, 2010, filed with the SEC on October 29, 2010. Stockholders will be able to obtain any
proxy statement, any amendments or supplements to the proxy statement and other documents filed by
CMC with the SEC for no charge at the SECs website at www.sec.gov. Copies will also be available
at no charge at CMCs website at www.cmc.com or by writing to CMC at 6565 N. MacArthur Blvd., Suite
800, Irving, Texas 75039, Attn: Corporate Secretary.