EX-99.1 2 cmc-2282023xearningsreleas.htm EX-99.1
Exhibit No. 99.1
News Release
COMMERCIAL METALS COMPANY REPORTS SECOND QUARTER FISCAL 2023 RESULTS
•Second quarter net earnings of $179.8 million, or $1.51 per diluted share
•Core EBITDA of $302.8 million
•Volume and value of North America downstream backlog near all-time highs
•Project bid volumes grew by a double-digit percentage year-over-year, signaling strength in upcoming construction season
•Arizona 2 project start-up on target; expected to begin production in the spring of 2023
Irving, TX - March 23, 2023 - Commercial Metals Company (NYSE: CMC) today announced financial results for its fiscal second quarter ended February 28, 2023. Net earnings were $179.8 million, or $1.51 per diluted share, on net sales of $2.0 billion, compared to prior year period net earnings of $383.3 million, or $3.12 per diluted share, on net sales of $2.0 billion.
During the second quarter of fiscal 2023, the Company recorded a net after-tax benefit of $14.0 million related to the settlement of an incentive resulting from the previous capital investment at CMC's Steel Oklahoma micro mill. This benefit was partially offset by approximately $5.4 million in net after-tax costs associated with ongoing commissioning efforts at Arizona 2. Excluding these items, second quarter adjusted earnings were $171.3 million, or $1.44 per diluted share, compared to adjusted earnings of $187.6 million, or $1.53 per diluted share, in the prior year period. The second quarter of fiscal 2022 included a net after-tax benefit of $195.8 million, primarily related to a gain on the sale of real estate in Southern California. "Adjusted EBITDA," "core EBITDA," "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.
Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, said, "CMC achieved strong financial results during the second quarter while managing a number of challenges, including weather-related shipment disruptions in our core geographies, costs associated with a major planned outage and steel product metal margin pressures. These headwinds notwithstanding, our key internal indicators remain positive, signaling a strong outlook for demand conditions in North America during the 2023 construction season and beyond. We are entering spring with record backlog value for this time of year and continue to experience healthy project bid volumes, giving us confidence in the strength of our book of business. Additionally, CMC stands to benefit from sustainable strong

(CMC Second Quarter Fiscal 2023 - 2)
demand from reshoring-oriented industrial projects and public infrastructure work, the more rebar-intensive nature of which represents a long-term tailwind for our business.”
Ms. Smith continued, “The start-up of our Arizona 2 mill by the end of this spring positions CMC to capitalize on these emerging structural trends. We are currently finalizing on-site preparation for commissioning and are excited to ramp up this world-class asset, the first in the world to have merchant bar production capabilities in a continuous process. Together with our fourth micro mill under development in Berkeley County, West Virginia and our Tensar growth platform, we continue to expect that our strategic investments will meaningfully enhance CMC's through-the-cycle cash flows and return on capital, creating substantial value for our shareholders while also enhancing our leadership position in sustainability metrics.”
The Company's balance sheet and liquidity position remained strong as of February 28, 2023. Cash and cash equivalents ended the quarter at $604.0 million, while available liquidity totaled $1.5 billion. CMC repurchased 330,000 shares of common stock during the quarter, returning $17.2 million of cash to shareholders. As of February 28, 2023, $121.8 million remained available under the current share repurchase authorization.
On March 21, 2023, the board of directors declared a quarterly dividend of $0.16 per share of CMC common stock payable to stockholders of record on April 3, 2023. The dividend to be paid on April 12, 2023, marks the 234 th consecutive quarterly payment by the Company, and represents a 14% increase from the dividend paid in April 2022.
Business Segments - Fiscal Second Quarter 2023 Review
Demand for CMC's finished steel products in North America remained healthy during the quarter, though construction activity slowed in certain geographies due to weather-related disruptions. Downstream bid volumes, a significant indicator of the construction project pipeline, improved from a year ago, resulting in expansion of contract backlog volume and value levels compared to the prior year period. Demand from industrial end markets, which are important for merchant products, were stable on both a sequential and year-over-year basis.
The North America segment reported adjusted EBITDA of $299.3 million for the second quarter of fiscal 2023, in comparison to $535.5 million in the prior year period. Excluding a $273.3 million gain on the sale of real estate recognized during the prior year period, the current year results represent a 14% increase. The improvement was driven by expanded margins over scrap cost on shipments of steel and downstream products. Controllable costs per ton of finished steel increased compared to the first quarter of fiscal 2023, primarily due to a significant scheduled replacement project that occurred during the quarter, as well as lower fixed cost leverage on seasonally slower shipments. Per unit costs of several key consumables continued to moderate throughout the quarter after reaching a peak late in fiscal 2022.

(CMC Second Quarter Fiscal 2023 - 3)
Shipment volumes of finished steel, which include steel products and downstream products, were relatively unchanged from the prior year period. Volume growth was constrained by weather challenges that included freezing and icy conditions in Texas and Oklahoma and flooding in California. The average selling price for steel products decreased by $56 per ton compared to the second quarter of fiscal 2022, while the cost of scrap utilized declined $90 per ton, resulting in a year-over-year increase of $34 per ton in steel products margin over scrap. The average selling price for downstream products increased by $249 per ton from the prior year period and $19 per ton on a sequential quarter basis.
The Europe segment reported adjusted EBITDA of $12.9 million for the second quarter of fiscal 2023, down 84% compared to adjusted EBITDA of $81.1 million for the prior year period. The decline was driven by higher energy costs, lower metal margins, and a modest reduction in shipment volumes. Europe end market demand was mixed during the quarter. Polish construction activity continued to grow modestly on a year-over-year basis, while industrial production across Central Europe continued to contract. CMC’s advantageous cost position and operational flexibility provided the ability to maintain strong shipment levels. Second quarter of fiscal 2023 volume of 436,000 tons was 20% above the average quarterly level of the last 10 years.
Average selling price decreased by $95 per ton in the second quarter compared to the prior year period, while the cost of scrap utilized declined $55 per ton. The result was a year-over-year decline in margin over scrap of $40 per ton. Average selling price and margin over scrap also decreased on a sequential basis by $36 per ton and $59 per ton, respectively.
Outlook
Ms. Smith said, "We remain confident in our outlook for financial performance in fiscal 2023, and we expect to generate sequential improvement in core EBITDA during the third quarter. North America finished steel product shipments are anticipated to improve from second quarter levels due to normal seasonality, the recovery of volumes delayed by weather disruptions, and the support of a historically high downstream backlog. We expect current and new industrial projects, as well as growing levels of state and federal infrastructure spending, will support CMC's North America volumes in the quarters ahead. In Europe, we anticipate seasonal improvement, and expect shipment levels will remain above the long-term historical average due to the enhanced production capabilities of our facilities.”
Ms. Smith added, "In the third quarter, we look forward to commissioning our Arizona 2 micro mill, representing the next phase of growth at CMC, and we also anticipate that recent North America long steel price increase announcements will stabilize metal margins at historically high levels. At the same time, the third quarter will be impacted by a scheduled upgrade project similar in magnitude to the planned outage taken during the second quarter.”

(CMC Second Quarter Fiscal 2023 - 4)
Conference Call
CMC invites you to listen to a live broadcast of its second quarter fiscal 2023 conference call today, Thursday, March 23, 2023, at 11:00 a.m. ET. Barbara R. Smith, Chairman of the Board, 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 Commercial Metals Company
Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products and provide related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, one rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland. Through its Tensar operations, CMC is a leading global provider of innovative ground and soil stabilization solutions selling into more than 80 national markets through two major product lines: Tensar® geogrids and Geopier® foundation systems.
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 effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, 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.
Our 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,

(CMC Second Quarter Fiscal 2023 - 5)
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, 2022 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 our downstream contracts 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, which is uncertain, but may prove to negatively impact our business and operations; 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 epidemics, including the COVID-19 pandemic, 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; 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

(CMC Second Quarter Fiscal 2023 - 6)
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 Second Quarter Fiscal 2023 - 7)

COMMERCIAL METALS COMPANY FINANCIAL & OPERATING STATISTICS (UNAUDITED)
|  | Three Months Ended |  | Six Months Ended
(in thousands, except per ton amounts) |  | 2/28/2023 |  | 11/30/2022 |  | 8/31/2022 |  | 5/31/2022 |  | 2/28/2022 |  | 2/28/2023 |  | 2/28/2022
North America |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 1,640,933 |  |  | $ | 1,816,899 |  |  | $ | 1,997,636 |  |  | $ | 2,033,150 |  |  | $ | 1,614,224 |  |  | $ | 3,457,832 |  |  | $ | 3,267,846 |
Adjusted EBITDA |  | 299,311 |  |  | 377,956 |  |  | 370,516 |  |  | 379,355 |  |  | 535,463 |  |  | 677,267 |  |  | 803,987 |
External tons shipped |  |  |  |  |  |  |  |  |  |  |  |  |  |
Raw materials |  | 321 |  |  | 316 |  |  | 359 |  |  | 353 |  |  | 329 |  |  | 637 |  |  | 663 |
Rebar |  | 425 |  |  | 461 |  |  | 451 |  |  | 505 |  |  | 407 |  |  | 886 |  |  | 849 |
Merchant and other |  | 236 |  |  | 243 |  |  | 249 |  |  | 274 |  |  | 245 |  |  | 479 |  |  | 502 |
Steel products |  | 661 |  |  | 704 |  |  | 700 |  |  | 779 |  |  | 652 |  |  | 1,365 |  |  | 1,351 |
Downstream products |  | 311 |  |  | 382 |  |  | 432 |  |  | 399 |  |  | 327 |  |  | 693 |  |  | 727 |
Average selling price per ton |  |  |  |  |  |  |  |  |  |  |  |  |  |
Raw materials |  | $ | 868 |  |  | $ | 824 |  |  | $ | 950 |  |  | $ | 1,207 |  |  | $ | 1,103 |  |  | $ | 846 |  |  | $ | 1,068 |
Steel products |  | 985 |  |  | 1,020 |  |  | 1,104 |  |  | 1,110 |  |  | 1,041 |  |  | 1,003 |  |  | 1,007 |
Downstream products |  | 1,418 |  |  | 1,399 |  |  | 1,348 |  |  | 1,244 |  |  | 1,169 |  |  | 1,408 |  |  | 1,126 |
Cost of raw materials per ton |  | $ | 639 |  |  | $ | 598 |  |  | $ | 717 |  |  | $ | 908 |  |  | $ | 834 |  |  | $ | 618 |  |  | $ | 800 |
Cost of ferrous scrap utilized per ton |  | $ | 346 |  |  | $ | 325 |  |  | $ | 387 |  |  | $ | 472 |  |  | $ | 436 |  |  | $ | 335 |  |  | $ | 432 |
Steel products metal margin per ton |  | $ | 639 |  |  | $ | 695 |  |  | $ | 717 |  |  | $ | 638 |  |  | $ | 605 |  |  | $ | 668 |  |  | $ | 575 |
Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 355,633 |  |  | $ | 406,513 |  |  | $ | 412,264 |  |  | $ | 484,564 |  |  | $ | 395,758 |  |  | $ | 762,146 |  |  | $ | 724,814 |
Adjusted EBITDA |  | 12,949 |  |  | 64,505 |  |  | 64,096 |  |  | 120,974 |  |  | 81,149 |  |  | 77,454 |  |  | 160,981 |
External tons shipped |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rebar |  | 183 |  |  | 204 |  |  | 177 |  |  | 170 |  |  | 172 |  |  | 387 |  |  | 275 |
Merchant and other |  | 253 |  |  | 269 |  |  | 251 |  |  | 306 |  |  | 278 |  |  | 522 |  |  | 540 |
Steel products |  | 436 |  |  | 473 |  |  | 428 |  |  | 476 |  |  | 450 |  |  | 909 |  |  | 815 |
Average selling price per ton |  |  |  |  |  |  |  |  |  |  |  |  |  |
Steel products |  | $ | 756 |  |  | $ | 792 |  |  | $ | 888 |  |  | $ | 967 |  |  | $ | 851 |  |  | $ | 775 |  |  | $ | 859 |
Cost of ferrous scrap utilized per ton |  | $ | 389 |  |  | $ | 366 |  |  | $ | 435 |  |  | $ | 530 |  |  | $ | 444 |  |  | $ | 377 |  |  | $ | 439 |
Steel products metal margin per ton |  | $ | 367 |  |  | $ | 426 |  |  | $ | 453 |  |  | $ | 437 |  |  | $ | 407 |  |  | $ | 398 |  |  | $ | 420 |

(CMC Second Quarter Fiscal 2023 - 8)

COMMERCIAL METALS COMPANY BUSINESS SEGMENTS (UNAUDITED)
|  | Three Months Ended |  | Six Months Ended
(in thousands) |  | 2/28/2023 |  | 11/30/2022 |  | 8/31/2022 |  | 5/31/2022 |  | 2/28/2022 |  | 2/28/2023 |  | 2/28/2022
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 1,640,933 |  |  | $ | 1,816,899 |  |  | $ | 1,997,636 |  |  | $ | 2,033,150 |  |  | $ | 1,614,224 |  |  | $ | 3,457,832 |  |  | $ | 3,267,846 |
Europe |  | 355,633 |  |  | 406,513 |  |  | 412,264 |  |  | 484,564 |  |  | 395,758 |  |  | 762,146 |  |  | 724,814 |
Corporate and Other |  | 21,437 |  |  | 3,901 |  |  | (2,835) |  |  | (1,987) |  |  | (1,094) |  |  | 25,338 |  |  | (1,971) |
Total net sales |  | $ | 2,018,003 |  |  | $ | 2,227,313 |  |  | $ | 2,407,065 |  |  | $ | 2,515,727 |  |  | $ | 2,008,888 |  |  | $ | 4,245,316 |  |  | $ | 3,990,689 |
Adjusted EBITDA |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 299,311 |  |  | $ | 377,956 |  |  | $ | 370,516 |  |  | $ | 379,355 |  |  | $ | 535,463 |  |  | $ | 677,267 |  |  | $ | 803,987 |
Europe |  | 12,949 |  |  | 64,505 |  |  | 64,096 |  |  | 120,974 |  |  | 81,149 |  |  | 77,454 |  |  | 160,981 |
Corporate and Other |  | (15,573) |  |  | (39,725) |  |  | (32,227) |  |  | (35,049) |  |  | (52,493) |  |  | (55,298) |  |  | (86,827) |
Total adjusted EBITDA |  | $ | 296,687 |  |  | $ | 402,736 |  |  | $ | 402,385 |  |  | $ | 465,280 |  |  | $ | 564,119 |  |  | $ | 699,423 |  |  | $ | 878,141 |

(CMC Second Quarter Fiscal 2023 - 9)

COMMERCIAL METALS COMPANY CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
| Three Months Ended February 28, |  | Six Months Ended February 28,
(in thousands, except share and per share data) | 2023 |  | 2022 |  | 2023 |  | 2022
Net sales | $ | 2,018,003 |  |  | $ | 2,008,888 |  |  | $ | 4,245,316 |  |  | $ | 3,990,689 |
Costs and operating expenses (income): |  |  |  |  |  |  |
Cost of goods sold | 1,621,763 |  |  | 1,614,965 |  |  | 3,341,177 |  |  | 3,201,375 |
Selling, general and administrative expenses | 150,427 |  |  | 127,985 |  |  | 306,550 |  |  | 251,563 |
Interest expense | 9,945 |  |  | 12,011 |  |  | 22,990 |  |  | 23,046 |
Asset impairments | 36 |  |  | 1,228 |  |  | 45 |  |  | 1,228 |
Loss on debt extinguishment | 27 |  |  | 16,052 |  |  | 178 |  |  | 16,052 |
Loss (gain) on sale of assets | 315 |  |  | (273,099) |  |  | 387 |  |  | (274,082) |
| 1,782,513 |  |  | 1,499,142 |  |  | 3,671,327 |  |  | 3,219,182 |
Earnings before income taxes | 235,490 |  |  | 509,746 |  |  | 573,989 |  |  | 771,507 |
Income taxes | 55,641 |  |  | 126,432 |  |  | 132,366 |  |  | 155,304 |
Net earnings | $ | 179,849 |  |  | $ | 383,314 |  |  | $ | 441,623 |  |  | $ | 616,203 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 1.53 |  |  | $ | 3.16 |  |  | $ | 3.77 |  |  | $ | 5.08 |
Diluted | $ | 1.51 |  |  | $ | 3.12 |  |  | $ | 3.71 |  |  | $ | 5.02 |
Cash dividends per share | $ | 0.16 |  |  | $ | 0.14 |  |  | $ | 0.32 |  |  | $ | 0.28 |
Average basic shares outstanding | 117,224,517 |  |  | 121,458,196 |  |  | 117,249,266 |  |  | 121,293,030 |
Average diluted shares outstanding | 118,723,259 |  |  | 122,852,410 |  |  | 118,985,098 |  |  | 122,747,981 |

(CMC Second Quarter Fiscal 2023 - 10)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share and per share data) |  | February 28, 2023 |  | August 31, 2022
Assets |  |  |  |
Current assets: |  |  |  |
Cash and cash equivalents |  | $ | 603,966 |  |  | $ | 672,596 |
Accounts receivable (less allowance for doubtful accounts of $4,928 and $4,990) |  | 1,263,547 |  |  | 1,358,907 |
Inventories, net |  | 1,144,268 |  |  | 1,169,696 |
Prepaid and other current assets |  | 266,365 |  |  | 240,269 |
Total current assets |  | 3,278,146 |  |  | 3,441,468 |
Property, plant and equipment, net |  | 2,159,730 |  |  | 1,910,871 |
Intangible assets, net |  | 248,723 |  |  | 257,409 |
Goodwill |  | 278,711 |  |  | 249,009 |
Other noncurrent assets |  | 519,541 |  |  | 378,270 |
Total assets |  | $ | 6,484,851 |  |  | $ | 6,237,027 |
Liabilities and stockholders' equity |  |  |  |
Current liabilities: |  |  |  |
Accounts payable |  | $ | 422,814 |  |  | $ | 428,055 |
Accrued expenses and other payables |  | 378,572 |  |  | 540,136 |
Current maturities of long-term debt and short-term borrowings |  | 264,762 |  |  | 388,796 |
Total current liabilities |  | 1,066,148 |  |  | 1,356,987 |
Deferred income taxes |  | 303,367 |  |  | 250,302 |
Other noncurrent liabilities |  | 232,415 |  |  | 230,060 |
Long-term debt |  | 1,099,728 |  |  | 1,113,249 |
Total liabilities |  | 2,701,658 |  |  | 2,950,598 |
Stockholders' equity: |  |  |  |
Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 117,205,307 and 117,496,053 shares |  | 1,290 |  |  | 1,290 |
Additional paid-in capital |  | 374,440 |  |  | 382,767 |
Accumulated other comprehensive income (loss) |  | 24,496 |  |  | (114,451) |
Retained earnings |  | 3,716,537 |  |  | 3,312,438 |
Less treasury stock, 11,855,357 and 11,564,611 shares at cost |  | (333,802) |  |  | (295,847) |
Stockholders' equity |  | 3,782,961 |  |  | 3,286,197 |
Stockholders' equity attributable to non-controlling interests |  | 232 |  |  | 232 |
Total stockholders' equity |  | 3,783,193 |  |  | 3,286,429 |
Total liabilities and stockholders' equity |  | $ | 6,484,851 |  |  | $ | 6,237,027 |

(CMC Second Quarter Fiscal 2023 - 11)

COMMERCIAL METALS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |  |
|  | Six Months Ended February 28, |  |
(in thousands) |  | 2023 |  | 2022 |  |
Cash flows from (used by) operating activities: |  |  |  |  |  |
Net earnings |  | $ | 441,623 |  |  | $ | 616,203 |  |  |
Adjustments to reconcile net earnings to net cash flows from operating activities: |  |  |  |  |  |
Depreciation and amortization |  | 102,399 |  |  | 82,360 |  |  |
Stock-based compensation |  | 33,624 |  |  | 25,870 |  |  |
Deferred income taxes and other long-term taxes |  | 26,930 |  |  | 34,980 |  |  |
Write-down of inventory |  | 5,532 |  |  | 123 |  |  |
Net loss (gain) on disposals of assets |  | 387 |  |  | (274,082) |  |  |
Loss on debt extinguishment |  | 178 |  |  | 16,052 |  |  |
Asset impairments |  | 45 |  |  | 1,228 |  |  |
Other |  | 4,006 |  |  | 712 |  |  |
Settlement of New Markets Tax Credit transaction |  | (17,659) |  |  | — |  |  |
Changes in operating assets and liabilities, net of acquisitions |  | (38,158) |  |  | (449,078) |  |  |
Net cash flows from operating activities |  | 558,907 |  |  | 54,368 |  |  |
Cash flows from (used by) investing activities: |  |  |  |  |  |
Capital expenditures |  | (289,251) |  |  | (191,562) |  |  |
Acquisitions, net of cash acquired |  | (65,153) |  |  | — |  |  |
Proceeds from insurance |  | 2,456 |  |  | 3,081 |  |  |
Proceeds from the sale of property, plant and equipment and other |  | 531 |  |  | 309,563 |  |  |
Other |  | (1,185) |  |  | — |  |  |
Net cash flows from (used by) investing activities |  | (352,602) |  |  | 121,082 |  |  |
Cash flows from (used by) financing activities: |  |  |  |  |  |
Proceeds from issuance of long-term debt, net |  | — |  |  | 740,403 |  |  |
Repayments of long-term debt |  | (160,263) |  |  | (313,174) |  |  |
Debt issuance costs |  | (1,800) |  |  | (2,977) |  |  |
Debt extinguishment costs |  | (96) |  |  | (13,642) |  |  |
Proceeds from accounts receivable facilities |  | 74,963 |  |  | 190,730 |  |  |
Repayments under accounts receivable facilities |  | (77,843) |  |  | (215,196) |  |  |
Treasury stock acquired |  | (66,323) |  |  | (17,010) |  |  |
Tax withholdings related to share settlements, net of purchase plans |  | (14,789) |  |  | (10,719) |  |  |
Dividends |  | (37,524) |  |  | (34,011) |  |  |
Net cash flows from (used by) financing activities |  | (283,675) |  |  | 324,404 |  |  |
Effect of exchange rate changes on cash |  | 6,545 |  |  | (1,283) |  |  |
Increase (decrease) in cash, restricted cash, and cash equivalents |  | (70,825) |  |  | 498,571 |  |  |
Cash, restricted cash and cash equivalents at beginning of period |  | 679,243 |  |  | 501,129 |  |  |
Cash, restricted cash and cash equivalents at end of period |  | $ | 608,418 |  |  | $ | 999,700 |  |  |
Supplemental information: |  |  |  |  |  |
Cash paid for income taxes |  | $ | 114,585 |  |  | $ | 133,194 |  |  |
Cash paid for interest |  | 35,036 |  |  | 24,916 |  |  |
Cash and cash equivalents |  | $ | 603,966 |  |  | $ | 846,587 |  |  |
Restricted cash |  | 4,452 |  |  | 153,113 |  |  |
Total cash, restricted cash and cash equivalents |  | $ | 608,418 |  |  | $ | 999,700 |  |  |

(CMC Second Quarter Fiscal 2023 - 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 and adjusted earnings are non-GAAP financial measures. Adjusted earnings per diluted share is defined as adjusted earnings on a diluted per share basis.
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 |  | Six Months Ended
(in thousands) | 2/28/2023 |  | 11/30/2022 |  | 8/31/2022 |  | 5/31/2022 |  | 2/28/2022 |  | 2/28/2023 |  | 2/28/2022
Net earnings | $ | 179,849 |  |  | $ | 261,774 |  |  | $ | 288,630 |  |  | $ | 312,429 |  |  | $ | 383,314 |  |  | $ | 441,623 |  |  | $ | 616,203 |
Interest expense | 9,945 |  |  | 13,045 |  |  | 14,230 |  |  | 13,433 |  |  | 12,011 |  |  | 22,990 |  |  | 23,046 |
Income taxes | 55,641 |  |  | 76,725 |  |  | 49,991 |  |  | 92,590 |  |  | 126,432 |  |  | 132,366 |  |  | 155,304 |
Depreciation and amortization | 51,216 |  |  | 51,183 |  |  | 49,081 |  |  | 43,583 |  |  | 41,134 |  |  | 102,399 |  |  | 82,360 |
Asset impairments | 36 |  |  | 9 |  |  | 453 |  |  | 3,245 |  |  | 1,228 |  |  | 45 |  |  | 1,228 |
Adjusted EBITDA | 296,687 |  |  | 402,736 |  |  | 402,385 |  |  | 465,280 |  |  | 564,119 |  |  | 699,423 |  |  | 878,141 |
Non-cash equity compensation | 16,949 |  |  | 16,675 |  |  | 9,122 |  |  | 11,986 |  |  | 16,251 |  |  | 33,624 |  |  | 25,870 |
Mill operational start-up costs(1) | 6,811 |  |  | 5,574 |  |  | — |  |  | — |  |  | — |  |  | 12,385 |  |  | — |
Settlement of New Markets Tax Credit transaction | (17,659) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (17,659) |  |  | — |
Acquisition and integration related costs and other | — |  |  | — |  |  | 1,008 |  |  | 4,478 |  |  | — |  |  | — |  |  | 3,165 |
Purchase accounting effect on inventory | — |  |  | — |  |  | 6,506 |  |  | 2,169 |  |  | — |  |  | — |  |  | — |
Gain on sale of assets | — |  |  | — |  |  | — |  |  | — |  |  | (273,315) |  |  | — |  |  | (273,315) |
Loss on debt extinguishment | — |  |  | — |  |  | — |  |  | — |  |  | 16,052 |  |  | — |  |  | 16,052 |
Core EBITDA | $ | 302,788 |  |  | $ | 424,985 |  |  | $ | 419,021 |  |  | $ | 483,913 |  |  | $ | 323,107 |  |  | $ | 727,773 |  |  | $ | 649,913 |

__________________________________
(1) Net of depreciation and non-cash equity compensation.

(CMC Second Quarter Fiscal 2023 - 13)
A reconciliation of net earnings to adjusted earnings is provided below:

| Three Months Ended |  | Six Months Ended
(in thousands, except per share data) | 2/28/2023 |  | 11/30/2022 |  | 8/31/2022 |  | 5/31/2022 |  | 2/28/2022 |  | 2/28/2023 |  | 2/28/2022
Net earnings | $ | 179,849 |  |  | $ | 261,774 |  |  | $ | 288,630 |  |  | $ | 312,429 |  |  | $ | 383,314 |  |  | $ | 441,623 |  |  | $ | 616,203 |
Asset impairments | 36 |  |  | 9 |  |  | 453 |  |  | 3,245 |  |  | 1,228 |  |  | 45 |  |  | 1,228 |
Mill operational start-up costs | 6,825 |  |  | 5,584 |  |  | — |  |  | — |  |  | — |  |  | 12,409 |  |  | — |
Settlement of New Markets Tax Credit transaction | (17,659) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (17,659) |  |  | — |
Acquisition and integration related costs and other | — |  |  | — |  |  | 1,008 |  |  | 4,478 |  |  | — |  |  | — |  |  | 3,165 |
Purchase accounting effect on inventory | — |  |  | — |  |  | 6,506 |  |  | 2,169 |  |  | — |  |  | — |  |  | — |
Gain on sale of assets | — |  |  | — |  |  | — |  |  | — |  |  | (273,315) |  |  | — |  |  | (273,315) |
Loss on debt extinguishment | — |  |  | — |  |  | — |  |  | — |  |  | 16,052 |  |  | — |  |  | 16,052 |
Total adjustments (pre-tax) | $ | (10,798) |  |  | $ | 5,593 |  |  | $ | 7,967 |  |  | $ | 9,892 |  |  | $ | (256,035) |  |  | $ | (5,205) |  |  | $ | (252,870) |
Tax items |  |  |  |  |  |  |  |  |  |  |  |  |
International restructuring | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (36,237) |
Related tax effects on adjustments | 2,268 |  |  | (1,175) |  |  | (1,673) |  |  | (2,077) |  |  | 60,274 |  |  | 1,093 |  |  | 59,609 |
Total tax items | 2,268 |  |  | (1,175) |  |  | (1,673) |  |  | (2,077) |  |  | 60,274 |  |  | 1,093 |  |  | 23,372 |
Adjusted earnings | $ | 171,319 |  |  | $ | 266,192 |  |  | $ | 294,924 |  |  | $ | 320,244 |  |  | $ | 187,553 |  |  | $ | 437,511 |  |  | $ | 386,705 |
Net earnings per diluted share | $ | 1.51 |  |  | $ | 2.20 |  |  | $ | 2.40 |  |  | $ | 2.54 |  |  | $ | 3.12 |  |  | $ | 3.71 |  |  | $ | 5.02 |
Adjusted earnings per diluted share | $ | 1.44 |  |  | $ | 2.24 |  |  | $ | 2.45 |  |  | $ | 2.61 |  |  | $ | 1.53 |  |  | $ | 3.68 |  |  | $ | 3.15 |

Media Contact:
Susan Gerber
(214) 689-4300