Attached files
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| 8-K - FORM 8-K - COMMERCIAL METALS Co | d426535d8k.htm |
Exhibit 99.1
| News Release |
|
COMMERCIAL METALS COMPANY REPORTS A FOURTH CONSECUTIVE PROFITABLE
QUARTER AND FULL YEAR PROFITS OF $207.5 MILLION
Irving, TX—October 24, 2012—Commercial Metals Company (NYSE: CMC) today reported for the fourth quarter ended August 31, 2012 net earnings of $30.2 million or $0.26 per diluted share on net sales of $1.9 billion, a significant improvement compared to a net loss of $120.3 million or $1.04 per share in the prior year fourth quarter. Net earnings for the year ended August 31, 2012 represent the fifth-best full year performance in CMC’s nearly 100 year history at $207.5 million or $1.78 per diluted share on sales of $7.8 billion. The fiscal year 2012 performance compares to a net loss of $129.6 million or $1.12 per diluted share on sales of $7.9 billion for the same period last year.
Joe Alvarado, President and Chief Executive Officer, commented, “We are pleased to report a fourth consecutive quarter of profitability and the fifth-best year in the history of our company, despite a backdrop of weak conditions in most major markets globally. Results have improved dramatically over last year’s fourth quarter. Consistent with the third quarter of this year, each operating segment posted quarterly adjusted operating profit. Our cash flow from operations substantially improved over the prior year.”
The board of directors of CMC declared a quarterly dividend of $0.12 on October 23, 2012 for shareholders of record on November 7, 2012. The dividend will be paid on November 21, 2012.
Fourth Quarter 2012 Review
Net earnings for this year’s fourth quarter from continuing operations were $17.0 million or $0.15 per diluted share. Adjusted EBITDA was $109.2 million for this year’s fourth quarter and cash flow from operations was $61.2 million. After-tax items included in continuing operations were:
| • | LIFO income of $18.3 million ($0.16 per diluted share) as compared to $6.3 million ($0.05 per share) of after-tax LIFO expense in the fourth quarter of 2011; |
| • | loss of $2.5 million ($0.02 per diluted share) related to the sale of a rebar fabrication shop in Rosslau, Germany; |
| • | expenses of $2.5 million ($0.02 per diluted share) related to the full valuation of certain state tax losses; and |
| • | expenses of $2.4 million ($0.02 per diluted share) related to our proxy contest and hostile tender offer. |
Earnings from discontinued operations were $13.2 million or $0.11 per diluted share, which primarily consists of the share sale of CMC’s Croatian subsidiary for a pre-tax gain of $13.8 million (including a $7.5 million gain in foreign currency translation). Certain assets excluded from the share sale were sold in June and the remaining assets were sold in September 2012. Total net cash proceeds for these transactions will be approximately $41 million.
Alvarado added, “A year ago we committed to exiting unprofitable businesses and as part of executing that plan, as of September 21, 2012 we have completed the sale of our Croatian pipe subsidiary. We expect to receive a net of $41 million in cash as a result of these transactions.”
(CMC Fourth Quarter Fiscal 2012 - Page 2 )
Americas Recycling recorded an adjusted operating profit of $8.3 million as compared to $10.8 million from prior year’s fourth quarter. Due to oversupply and reduced export demand, ferrous scrap prices rapidly declined in the first two months of the fourth quarter of 2012, before partially recovering in August. Lower demand negatively affected both the segment’s margins and volumes. On the nonferrous side, the segment’s volume and pricing declined compared to a year ago.
Americas Mills recorded an adjusted operating profit of $62.3 million, $16.7 million more than last year’s fourth quarter. The segment’s volumes were essentially flat quarter over quarter while margins were better. Due to lower input prices, LIFO for this segment improved $27.4 million to income of $21.6 million during this year’s fourth quarter.
The Americas Fabrication segment recorded an adjusted operating profit of $1.5 million in this year’s fourth quarter, marking a significant improvement of $44.3 million over last year’s fourth quarter adjusted operating loss of $42.8 million. The segment continued to benefit from stable material pricing and improved margins in the backlog. Compared to a year ago, both shipments and bid activity improved for this segment.
The International Mill segment had an adjusted operating profit of $5.4 million for this year’s fourth quarter compared to an adjusted operating profit of $14.6 million during last year’s fourth quarter. Included in this year’s fourth quarter is a pre-tax loss of $3.8 million related to the sale of a rebar fabrication shop in Rosslau, Germany. During this year’s fourth quarter, the segment shipped substantial billet orders, mostly to Asian markets. Market conditions in Europe continue to be soft, putting pressure on margins, and significant uncertainty remains.
Our International Marketing and Distribution segment recorded an adjusted operating profit of $1.5 million for this year’s fourth quarter compared to an adjusted operating profit of $22.7 million for last year’s fourth quarter. Within this segment, the reduced profitability is primarily due to reduced demand in some of our key products marketed by our raw materials division. Uncertainty around the outcome of economic stimulus in China is weighing on this division’s results. Furthermore, our European trading division experienced lower volumes and margins as a result of the continued Euro zone market conditions.
Full Year 2012 Review
Continuing operations for fiscal year 2012 were net earnings of $209.0 million or $1.79 per diluted share. For the fiscal year ended August 31, 2012, cash flow from operations was $196.0 million and adjusted EBITDA was $364.2 million, which are $168.2 million and $127.0 million higher, respectively, than the prior year. Cash and short-term investments totaled $262.4 million as of August 31, 2012. After-tax items included in continuing operations were:
| • | LIFO income of $29.6 million ($0.25 per diluted share) as compared to $50.0 million ($0.43 per diluted share) of expense in fiscal 2011; |
| • | a tax benefit of $102.1 million ($0.87 per diluted share) related to ordinary worthless stock and bad debt deductions from the prior investment in CMC’s Croatian subsidiary; |
| • | a tax benefit of $11.5 million ($0.10 per diluted share) for research and experimentation expenditures; and |
| • | expenses of $9.7 million ($0.08 per diluted share) related to our proxy contest and hostile tender offer. |
(CMC Fourth Quarter Fiscal 2012 - Page 3 )
Discontinued operations reflected a net loss of $1.5 million for the full year, attributable to the wind down of the Croatian pipe mill, which was offset by a $13.8 million pre-tax gain on sale of the Croatian subsidiary.
Outlook
Alvarado concluded, “In general we see economic recovery lacking meaningful momentum. Scrap prices continue to move down as we begin our fiscal year 2013 but we do expect a reversal of this trend during the winter months when supply tightens. We believe that, despite weakness in the scrap markets, our Recycling business has done a good job adjusting to the market volatility and maintaining profitability. Domestically, there is clear indication that residential construction is improving, which is a leading indicator of increased non-residential activity. Our International Mill segment continues to face difficult markets due to economic uncertainty in the Euro zone. Lastly, our International Marketing and Distribution segment faces substantial headwinds due to reduced demand in our raw materials division as well as the impact of China’s unclear growth outlook. As always, we remain committed to improving our cost structure and cash flows.”
Conference Call
CMC invites you to listen to a live broadcast of its fourth quarter 2012 conference call today, Wednesday, October 24, 2012, at 11:00 a.m. ET. Joe Alvarado, 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 the webcast on the next business day. Financial and statistical information presented in the broadcast are located on CMC’s website under “Investors”.
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 Company’s expectations relating to economic conditions, product pricing and demand, scrap prices, inventory levels, instability within the Euro zone and general market conditions. There are inherent risks and uncertainties in any forward-looking statements. Variances will occur and some could be materially different from our current expectations. 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.
Developments that could impact the Company’s expectations include the following: absence of global economic recovery or possible recession relapse; construction activity or lack thereof; decisions by governments affecting the level of steel imports, including tariffs and duties; 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, including scrap metal, energy, insurance and supply prices; passage of new, or interpretation of existing, environmental laws and regulations; and the pace of overall economic activity, particularly in China.
(CMC Fourth Quarter Fiscal 2012 - Page 4 )
COMMERCIAL METALS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended August 31, |
Year
Ended August 31, |
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| (in thousands, except share data) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net sales |
$ | 1,878,147 | $ | 2,243,920 | $ | 7,828,440 | $ | 7,863,345 | ||||||||
| Costs and expenses: |
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| Cost of goods sold |
1,698,168 | 2,061,632 | 7,108,938 | 7,213,674 | ||||||||||||
| Selling, general and administrative expenses |
118,223 | 136,834 | 486,606 | 516,778 | ||||||||||||
| Impairment of assets |
528 | 24,466 | 607 | 24,466 | ||||||||||||
| Interest expense |
17,551 | 16,291 | 69,496 | 69,821 | ||||||||||||
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| 1,834,470 | 2,239,223 | 7,665,647 | 7,824,739 | |||||||||||||
| Earnings from continuing operations before taxes |
43,677 | 4,697 | 162,793 | 38,606 | ||||||||||||
| Income taxes (benefit) |
26,634 | 10,640 | (46,190 | ) | 19,328 | |||||||||||
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| Earnings (loss) from continuing operations |
17,043 | (5,943 | ) | 208,983 | 19,278 | |||||||||||
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| Earnings (loss) from discontinued operations before taxes |
12,868 | (116,963 | ) | (9,912 | ) | (151,670 | ) | |||||||||
| Tax benefit |
(307 | ) | (2,685 | ) | (8,419 | ) | (2,988 | ) | ||||||||
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| Earnings (loss) from discontinued operations |
13,175 | (114,278 | ) | (1,493 | ) | (148,682 | ) | |||||||||
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| Net earnings (loss) |
30,218 | (120,221 | ) | 207,490 | (129,404 | ) | ||||||||||
| Less net earnings attributable to noncontrolling interests |
3 | 50 | 6 | 213 | ||||||||||||
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| Net earnings (loss) attributable to CMC |
$ | 30,215 | $ | (120,271 | ) | $ | 207,484 | $ | (129,617 | ) | ||||||
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| Basic earnings (loss) per share attributable to CMC: |
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| Earnings (loss) from continuing operations |
$ | 0.15 | $ | (0.05 | ) | $ | 1.80 | $ | 0.16 | |||||||
| Earnings (loss) from discontinued operations |
0.11 | (0.99 | ) | (0.01 | ) | (1.29 | ) | |||||||||
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| Net earnings (loss) |
$ | 0.26 | $ | (1.04 | ) | $ | 1.79 | $ | (1.13 | ) | ||||||
| Diluted earnings (loss) per share attributable to CMC: |
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| Earnings (loss) from continuing operations |
$ | 0.15 | $ | (0.05 | ) | $ | 1.79 | $ | 0.16 | |||||||
| Earnings (loss) from discontinued operations |
0.11 | (0.99 | ) | (0.01 | ) | (1.28 | ) | |||||||||
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| Net earnings (loss) |
$ | 0.26 | $ | (1.04 | ) | $ | 1.78 | $ | (1.12 | ) | ||||||
| Cash dividends per share |
$ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 | ||||||||
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| Average basic shares outstanding |
116,267,566 | 115,523,088 | 115,861,986 | 114,995,616 | ||||||||||||
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| Average diluted shares outstanding |
116,904,863 | 115,523,088 | 116,783,160 | 116,111,123 | ||||||||||||
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(CMC Fourth Quarter Fiscal 2012 - Page 5 )
COMMERCIAL METALS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in thousands) |
August 31, 2012 |
August 31, 2011 |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 262,422 | $ | 222,390 | ||||
| Accounts receivable, net |
958,364 | 956,852 | ||||||
| Inventories, net |
807,923 | 908,338 | ||||||
| Other |
211,122 | 238,673 | ||||||
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| Total current assets |
2,239,831 | 2,326,253 | ||||||
| Net property, plant and equipment |
994,304 | 1,112,015 | ||||||
| Goodwill |
76,897 | 77,638 | ||||||
| Other assets |
130,214 | 167,225 | ||||||
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| Total assets |
$ | 3,441,246 | $ | 3,683,131 | ||||
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| Liabilities and stockholders’ equity |
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| Current liabilities: |
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| Accounts payable-trade |
$ | 433,132 | $ | 585,289 | ||||
| Accounts payable-documentary letters of credit |
95,870 | 170,683 | ||||||
| Accrued expenses and other payables |
343,337 | 377,774 | ||||||
| Notes payable |
24,543 | 6,200 | ||||||
| Current maturities of long-term debt |
4,252 | 58,908 | ||||||
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| Total current liabilities |
901,134 | 1,198,854 | ||||||
| Deferred income taxes |
20,271 | 49,572 | ||||||
| Other long-term liabilities |
116,261 | 106,560 | ||||||
| Long-term debt |
1,157,073 | 1,167,497 | ||||||
| Stockholders’ equity attributable to CMC |
1,246,368 | 1,160,425 | ||||||
| Stockholders’ equity attributable to noncontrolling interests |
139 | 223 | ||||||
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| Total equity |
1,246,507 | 1,160,648 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 3,441,246 | $ | 3,683,131 | ||||
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(CMC Fourth Quarter Fiscal 2012 - Page 6 )
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Year
Ended August 31, |
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| (in thousands) |
2012 | 2011 | ||||||
| Cash flows from (used by) operating activities: |
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| Net earnings (loss) |
$ | 207,490 | $ | (129,404 | ) | |||
| Adjustments to reconcile net earnings (loss) to cash flows from (used by) operating activities: |
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| Depreciation and amortization |
137,310 | 159,576 | ||||||
| Provision for losses (recoveries) on receivables, net |
(2,463 | ) | 306 | |||||
| Share-based compensation |
13,125 | 12,893 | ||||||
| Amortization of interest rate swaps termination gain |
(5,815 | ) | — | |||||
| Deferred tax benefit |
(59,999 | ) | (19,856 | ) | ||||
| Tax benefits from stock plans |
(1,968 | ) | (2,355 | ) | ||||
| Net gain on sale of assets and other |
(11,932 | ) | (1,315 | ) | ||||
| Write-down of inventory |
13,917 | 25,503 | ||||||
| Asset impairment |
3,316 | 120,145 | ||||||
| Changes in operating assets and liabilities, net of acquisitions: |
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| Decrease (increase) in accounts receivable |
68,260 | (168,779 | ) | |||||
| Accounts receivable sold (repurchased), net |
(77,116 | ) | 78,297 | |||||
| Decrease (increase) in inventories |
53,449 | (200,204 | ) | |||||
| Decrease in other assets |
5,001 | 73,382 | ||||||
| Increase (decrease) in accounts payable, accrued expenses, other payables and income taxes |
(157,025 | ) | 82,642 | |||||
| Increase (decrease) in other long-term liabilities |
10,443 | (3,084 | ) | |||||
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| Net cash flows from operating activities |
195,993 | 27,747 | ||||||
| Cash flows from (used by) investing activities: |
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| Capital expenditures |
(113,853 | ) | (73,215 | ) | ||||
| Proceeds from the sale of property, plant and equipment and other |
55,360 | 53,394 | ||||||
| Proceeds from the sale of equity method investments |
— | 10,802 | ||||||
| Acquisitions, net of cash acquired |
— | (48,386 | ) | |||||
| Decrease (increase) in deposit for letters of credit |
31,053 | (4,123 | ) | |||||
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| Net cash flows used by investing activities |
(27,440 | ) | (61,528 | ) | ||||
| Cash flows from (used by) financing activities: |
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| Decrease in documentary letters of credit |
(74,493 | ) | (55,950 | ) | ||||
| Short-term borrowings, net change |
18,607 | (10,253 | ) | |||||
| Repayments on long-term debt |
(64,801 | ) | (33,577 | ) | ||||
| Proceeds from termination of interest rate swaps |
52,733 | — | ||||||
| Stock issued under incentive and purchase plans, net of forfeitures |
(81 | ) | 9,615 | |||||
| Cash dividends |
(55,617 | ) | (55,177 | ) | ||||
| Purchase of noncontrolling interests |
(55 | ) | (4,027 | ) | ||||
| Tax benefits from stock plans |
1,968 | 2,355 | ||||||
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| Net cash flows used by financing activities |
(121,739 | ) | (147,014 | ) | ||||
| Effect of exchange rate changes on cash |
(6,782 | ) | 3,872 | |||||
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| Increase (decrease) in cash and cash equivalents |
40,032 | (176,923 | ) | |||||
| Cash and cash equivalents at beginning of year |
222,390 | 399,313 | ||||||
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| Cash and cash equivalents at end of year |
$ | 262,422 | $ | 222,390 | ||||
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(CMC Fourth Quarter Fiscal 2012 - Page 7 )
COMMERCIAL METALS COMPANY
OPERATING STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)
| Three Months Ended August 31, |
Year Ended August 31, | |||||||||||||||
| (short tons in thousands) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Americas Steel Mills rebar shipments |
384 | 367 | 1,370 | 1,280 | ||||||||||||
| Americas Steel Mills structural and other shipments |
318 | 336 | 1,312 | 1,238 | ||||||||||||
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| Total Americas Steel Mills tons shipped |
702 | 703 | 2,682 | 2,518 | ||||||||||||
| International Mill shipments |
420 | 399 | 1,584 | 1,494 | ||||||||||||
| Americas Steel Mills average FOB selling price (total sales) |
$ | 678 | $ | 697 | $ | 706 | $ | 669 | ||||||||
| Americas Steel Mills average cost ferrous scrap utilized |
$ | 346 | $ | 383 | $ | 379 | $ | 364 | ||||||||
| Americas Steel Mills metal margin |
$ | 332 | $ | 314 | $ | 327 | $ | 305 | ||||||||
| Americas Steel Mills average ferrous scrap purchase price |
$ | 304 | $ | 352 | $ | 339 | $ | 329 | ||||||||
| International Mill average FOB selling price (total sales) |
$ | 570 | $ | 679 | $ | 601 | $ | 638 | ||||||||
| International Mill average cost ferrous scrap utilized |
$ | 351 | $ | 413 | $ | 385 | $ | 389 | ||||||||
| International Mill metal margin |
$ | 219 | $ | 266 | $ | 216 | $ | 249 | ||||||||
| International Mill average ferrous scrap purchase price |
$ | 291 | $ | 349 | $ | 315 | $ | 325 | ||||||||
| Americas Fabrication rebar shipments |
251 | 244 | 911 | 851 | ||||||||||||
| Americas Fabrication structural and post shipments |
35 | 35 | 150 | 155 | ||||||||||||
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| Total Americas Fabrication tons shipped |
286 | 279 | 1,061 | 1,006 | ||||||||||||
| Americas Fabrication average selling price (excluding stock and buyout sales) |
$ | 920 | $ | 866 | $ | 906 | $ | 817 | ||||||||
| Americas Recycling tons shipped |
582 | 714 | 2,439 | 2,469 | ||||||||||||
| Three Months Ended August 31, |
Year
Ended August 31, |
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| (in thousands) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net sales |
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| Americas Recycling |
$ | 359,300 | $ | 523,404 | $ | 1,606,161 | $ | 1,829,537 | ||||||||
| Americas Mills |
539,311 | 576,992 | 2,155,817 | 2,036,325 | ||||||||||||
| Americas Fabrication |
380,951 | 357,549 | 1,381,638 | 1,225,722 | ||||||||||||
| International Mill |
268,248 | 306,808 | 1,033,357 | 1,046,233 | ||||||||||||
| International Marketing and Distribution |
610,485 | 735,891 | 2,727,319 | 2,650,899 | ||||||||||||
| Corporate and Eliminations |
(280,148 | ) | (256,724 | ) | (1,075,852 | ) | (925,371 | ) | ||||||||
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| Total net sales |
$ | 1,878,147 | $ | 2,243,920 | $ | 7,828,440 | $ | 7,863,345 | ||||||||
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| Adjusted operating profit (loss) |
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| Americas Recycling |
$ | 8,346 | $ | 10,808 | $ | 39,446 | $ | 43,059 | ||||||||
| Americas Mills |
62,316 | 45,593 | 233,933 | 161,731 | ||||||||||||
| Americas Fabrication |
1,453 | (42,830 | ) | (15,697 | ) | (129,141 | ) | |||||||||
| International Mill |
5,353 | 14,584 | 23,044 | 47,594 | ||||||||||||
| International Marketing and Distribution |
1,488 | 22,749 | 47,287 | 76,337 | ||||||||||||
| Corporate and Eliminations |
(16,359 | ) | (28,412 | ) | (89,286 | ) | (86,004 | ) | ||||||||
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| Adjusted operating profit from continuing operations |
62,597 | 22,492 | 238,727 | 113,576 | ||||||||||||
| Adjusted operating profit (loss) from discontinued operations |
12,868 | (117,301 | ) | (8,675 | ) | (150,678 | ) | |||||||||
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| Adjusted operating profit (loss) |
$ | 75,465 | $ | (94,809 | ) | $ | 230,052 | $ | (37,102 | ) | ||||||
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(CMC Fourth Quarter Fiscal 2012 - Page 8 )
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 (Loss) is a non-GAAP financial measure. Adjusted operating profit (loss) is used to evaluate the financial performance of the Company. Adjusted operating profit (loss) is the sum of our earnings (loss) before income taxes, outside financing costs 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 believe that removing these costs provides a clearer perspective of the current operating performance. Adjusted operating profit (loss) may be inconsistent with similar measures presented by other companies.
| Three Months Ended August 31, |
Year
Ended August 31, |
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| (in thousands) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Earnings (loss) from continuing operations |
$ | 17,043 | $ | (5,943 | ) | $ | 208,983 | $ | 19,278 | |||||||
| Interest expense |
17,551 | 16,291 | 69,496 | 69,821 | ||||||||||||
| Income taxes (benefit) |
26,634 | 10,640 | (46,190 | ) | 19,328 | |||||||||||
| Discounts on sales of accounts receivable |
1,369 | 1,504 | 6,438 | 5,149 | ||||||||||||
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| Adjusted operating profit from continuing operations |
62,597 | 22,492 | 238,727 | 113,576 | ||||||||||||
| Adjusted operating profit (loss) from discontinued operations |
12,868 | (117,301 | ) | (8,675 | ) | (150,678 | ) | |||||||||
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| Adjusted operating profit (loss) |
$ | 75,465 | $ | (94,809 | ) | $ | 230,052 | $ | (37,102 | ) | ||||||
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Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is the sum of our earnings (loss) before income taxes, outside financing costs, depreciation, amortization and non-cash impairment charges. It excludes the Company’s 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 Company’s 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 Company’s note agreements. Additionally, Adjusted EBITDA is one measure used to assess the Company’s unleveraged performance of our investments. Adjusted EBITDA may be inconsistent with similar measures presented by other companies.
| Three Months Ended August 31, |
Year
Ended August 31, |
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| (in thousands) |
2012 | 2011 | 2012 | 2011 | ||||||||||||
| Earnings (loss) from continuing operations |
$ | 17,043 | $ | (5,943 | ) | $ | 208,983 | $ | 19,278 | |||||||
| Less net earnings attributable to noncontrolling interests |
(3 | ) | (50 | ) | (6 | ) | (213 | ) | ||||||||
| Interest expense |
17,551 | 16,291 | 69,496 | 69,821 | ||||||||||||
| Income taxes (benefit) |
26,634 | 10,640 | (46,190 | ) | 19,328 | |||||||||||
| Depreciation, amortization and impairment charges |
33,898 | 61,308 | 137,289 | 178,251 | ||||||||||||
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| Adjusted EBITDA from continuing operations |
95,123 | 82,246 | 369,572 | 286,465 | ||||||||||||
| Adjusted EBITDA from discontinued operations |
14,028 | (19,702 | ) | (5,337 | ) | (49,215 | ) | |||||||||
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| Adjusted EBITDA |
$ | 109,151 | $ | 62,544 | $ | 364,235 | $ | 237,250 | ||||||||
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Adjusted EBITDA to interest coverage for the
| Three Months Ended August 31, 2012 | Year Ended August 31, 2012 | |||
| $109,151 / 17,551 = 6.2 | $364,235 / 69,496 = 5.2 |
(CMC Fourth Quarter Fiscal 2012 - Page 9)
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, 2012 to the most comparable GAAP measure, stockholders’ equity:
| Stockholders’ equity attributable to CMC |
$ | 1,246,368 | ||
| Long-term debt |
1,157,073 | |||
| Deferred income taxes |
20,271 | |||
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| Total capitalization |
$ | 2,423,712 |
OTHER FINANCIAL INFORMATION
Long-term debt to cap ratio as of August 31, 2012:
Debt divided by capitalization
| $1,157,073 / 2,423,712 = 47.7% |
Total debt to cap plus short-term debt plus notes payable ratio as of August 31, 2012:
| ( $1,157,073 + 4,252 + 24,543 ) / ( $2,423,712 + 4,252 + 24,543 ) = 48.4% |
Current ratio as of August 31, 2012:
Current assets divided by current liabilities
| $2,239,831 / 901,134 = 2.5 |
Contact: Barbara Smith
Chief Financial Officer
214.689.4300