Attached files
| file | filename |
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| 8-K - 8-K - COMMERCIAL METALS Co | cmc-20210617.htm |
| EX-99.1 - EX-99.1 - COMMERCIAL METALS Co | cmc-05312021xpressreleasex.htm |
Q3 FY 2021 SUPPLEMENTAL SLIDES JUNE 17, 2021
CAUTIONARY STATEMENTS This presentation contains or incorporates by reference a number of "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, 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, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations and our expectations or beliefs concerning future events. The statements in this report 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. There are inherent risks and uncertainties in any forward- looking statements. We caution readers not to place undue reliance on any forward-looking statements. Our forward-looking statements are based on management's expectations and beliefs as of the time this document was prepared or, with respect to any document incorporated by reference, as of the time such document 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, 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 Part I, Item 1A, Risk Factors, of our annual report on Form 10-K for the fiscal year ended August 31, 2020 and in subsequent quarterly reports on Form 10-Q, 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; impacts from COVID-19 on the economy, demand for our products, global supply chain and on our operations, including the responses of governmental authorities to contain COVID-19 and the impact from the distribution of various COVID-19 vaccines; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; compliance with and changes in existing and future government 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; potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts; activity in repurchasing shares of our common stock under our repurchase program; 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 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; operating and start-up 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 investment; lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; impact of goodwill impairment charges; impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including the impact of the Biden administration on current trade regulations, such as Section 232 trade tariffs, tax legislation and other regulations which might adversely impact our business; availability and pricing of electricity, electrodes and natural gas for mill operations; 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; ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which we exert little influence, including 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. 2Q3 FY21 Supplemental Slides | June 17, 2021
A CLEAR PATH TO VALUE CREATION Q3 FY21 Supplemental Slides | June 17, 2021 3 ✓ Leading positions in core product and geographical markets ✓ Focused strategy that centers on key capabilities and competitive strengths ✓ Vertical structure that optimizes returns for the entire value chain ✓ Strong financial position with flexibility to execute on strategy ✓ Disciplined capital allocation focused on maximizing returns for our shareholders
KEY TAKEAWAYS FROM TODAY’S CALL Q3 FY21 Supplemental Slides | June 17, 2021 4 Generated record financial results at the consolidated and segment levels • Record Core EBITDA from continuing operations • Highest-ever adjusted EBITDA for North America and Europe segments Continued execution on in-flight growth initiatives • Record shipments of merchant bar in North America; 16% above trailing two-year average • Achieved targeted cost reduction benefit from closure of Steel CA rolling mill • 7th consecutive quarter of year-over-year reductions in North America controllable cost per ton of finished steel shipped Progress on key strategic growth initiatives • Began hot commissioning of 3rd Polish rolling line • Received air permit for Arizona 2 micro mill; construction underway End markets were strong across all products and geographies • Robust North America construction activity with good project pipeline activity Strong financial position provides continued flexibility to fund growth, weather economic uncertainty, pursue opportunistic M&A, and provide shareholder returns Q3 Core EBITDA1 of $230M Up 49% y/y Q3 Annualized ROIC2 of 18% Adjusted EPS of $1.04 Up 76% y/y Notes: [1] Core EBITDA is a non-GAAP measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. [2] Return on Invested Capital is a non-GAAP measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document.
Q3 FY21 Supplemental Slides | June 17, 2021 5 SUSTAINABLE FROM THE START, NATURALLY CMC WILL SOON PUBLISH A GREATLY ENHANCED CORPORATE SUSTAINABILITY REPORT Establishes ambitious, environmental targets Expands environmental, social, and governance disclosures Outlines our leadership position on environmental performance
• Will utilize current excess melt capacity, adding roughly 200,000 tons of finished steel output • Helps to leverage fixed costs • Expected to add $20 million of annual EBITDA through-the- cycle 3 R D P O L IS H R O L L IN G L IN E • Total capital spending below original budget • Project timing looks favorable; expect to ramp up in strong market environment • Adds significant production flexibility • Began hot commission of 3rd rolling line in Europe near end of Q3 − Process going well, expect first commercial sale in late Q4 • Received air permit for Arizona 2 project − Project tracking on time; construction underway • Significant increase of steel product margins over scrap in North America and Europe − Margins up $74 per ton sequentially in North America, up $84 in Europe • Strong margins on sales of raw materials; average selling price up for 5th straight quarter • Robust demand activity across North America end markets driving year-over-year increase in shipments of each major steel product category • Solid management of North America controllable costs per ton, achieving year-over-year reduction despite well publicized inflationary pressures • Downstream margin over scrap compressed by rising scrap costs, but indicators of future pricing (i.e. bids) were positive • Strong demand across Europe segment’s various end markets; second highest ever third quarter shipment levels Q3 FY21 Supplemental Slides | June 17, 2021 6 P E R F O R M A N C E D R IV E R S OPERATIONAL UPDATE S T R A T E G IC IT E M S
155 230 48 36 (10) 1 0 50 100 150 200 250 Q3 2020 North America Segment EBITDA Europe Segment EBITDA Corporate & Eliminations Non-Operating Items Q3 2021 Q3 FY21 Supplemental Slides | June 17, 2021 7 CONSOLIDATED OPERATING RESULTS – QUARTERLY Q3 ’20 Q4 ’20 Q1 ‘21 Q2 ‘21 Q3 ‘21 External Finished Steel Tons Shipped1 1,475 1,541 1,518 1,436 1,601 Core EBITDA 154,815 $175,994 $156,561 $171,087 $230,464 Core EBITDA per Ton of Finished Steel Shipped $105 $114 $103 $119 $144 Adjusted Earnings from Continuing Operations $70,367 $95,307 $69,778 $79,767 $127,106 Performance Summary Units in 000’s unless noted otherwise • $4.5 million gain on sale of small railroad track reclamation business Non-Operating Charges / Benefits Figures are pre-tax for Q3 2021 Core EBITDA Bridge – Q3 2020 to Q3 2021 $ Millions [1] External Finished Steel Tons Shipped equal to shipments of Steel Products plus Downstream Products Other Note: Core EBITDA and Adjusted earnings from continuing operations are non-GAAP measures. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document.
145 150 139 158 173 710 731 697 663 619 385 363 346 351 425 0 20 40 60 80 100 120 140 160 180 200 0 100 200 300 400 500 600 700 800 Q3 ’20 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Adjusted EBITDA per Ton of Finished Steel Shipped Downstream Products Margin Over Scrap (1 Qtr Lag) Steel Products Margin Over Scrap 70 100 130 Q3 ’20 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Wgt Avg Finished Steel ASP Wgt Avg Finished Steel Mgn Over Scrap Controllable Costs Adjusted EBITDA per ton Q3 FY21 Supplemental Slides | June 17, 2021 8 NORTH AMERICA – QUARTERLY Q3 ’20 Q4 ’20 Q1 ‘21 Q2 ‘21 Q3 ‘21 External Finished Steel Tons Shipped1 1,101 1,161 1,121 1,083 1,197 Adjusted EBITDA $159,394 $174,219 $155,634 $171,612 $207,330 Adjusted EBITDA per Ton of Finished Steel Shipped $145 $150 $139 $158 $173 Adjusted EBITDA Margin 13.7% 14.2% 13.0% 13.6% 13.3% Performance Summary Units in 000’s unless noted otherwise • Significant increase in steel product margins over scrap − Up $40 per ton y/y and $74 per ton sequentially • Expanded margins on raw material sales • Volumes of finished steel shipped increased 9% from the prior year • Solid cost management led to modest y/y reduction to controllable cost per ton of finished steel shipped Key Performance Drivers Q3 2021 vs Q3 2020 North America – Key Margins $ / ton D P a n d S P M a rg in O v e r S c ra p A d ju s te d E B IT D A p e r to n North America Indexed Margins and Controllable Cost $ / ton of external finished steel shipped Notes: [1] External Finished Steel Tons Shipped equal to shipments of Steel Products plus Downstream Products [2] Steel Products Margin Over Scrap equals Average Selling Price minus Cost of ferrous scrap utilized [3] Downstream Products Margin Over Scrap equals Average Selling Price minus Cost of ferrous scrap utilized [2] [3]
50 100 150 200 250 300 350 Q3 ’20 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Steel Product Margins Over Scrap Controllable Costs Adjusted EBITDA per Ton 38 60 36 46 124 198 196 199 204 288 0 20 40 60 80 100 120 140 100 140 180 220 260 300 Q3 ’20 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Adjusted EBITDA per Ton Steel Products Margin Over Scrap Notes: [1] External Finished Steel Tons Shipped equal to shipments of Steel Products plus Downstream Products [2] Steel Products Margin Over Scrap equals Average Selling Price minus Cost of ferrous scrap utilized Q3 FY21 Supplemental Slides | June 17, 2021 9 EUROPE– QUARTERLY Q3 ’20 Q4 ’20 Q1 ’21 Q2 ‘21 Q3 ‘21 External Finished Steel Tons Shipped1 374 380 397 353 404 Adjusted EBITDA $14,270 $22,927 $14,470 $16,107 $50,005 Adjusted EBITDA per Ton of Finished Steel Shipped $38 $60 $36 $46 $124 Adjusted EBITDA Margin 8.2% 12.7% 7.4% 8.0% 17.6% Performance Summary Units in 000’s unless noted otherwise • Significant increase in margins over scrap − Up $90 per ton y/y and $84 per ton sequentially • Strong demand across all products − Rebar shipments increased 16% from the prior year, merchant and other up 4% • Controllable costs per ton were relatively flat from the prior year Key Performance Drivers Q3 2021 vs Q3 2020 Europe – Key Margins $ / ton S te e l P ro d u c t M a rg in O v e r S c ra p A d ju s te d E B IT D A p e r to n Europe Indexed Margins and Controllable Cost $ / ton of finished product shipped [2]
($4) ($26) ($108) $73 $149 $226 $272 ($150) ($100) ($50) $0 $50 $100 $150 $200 $250 $300 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 LTM Q3 FY'21 ADJUSTED EBITDA LESS CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 1 CMC’s cash flow capabilities have been greatly enhanced through our strategic transformation − Will fund current projects using organic cash generation FY 2021 capital expenditures expected between $200 million to $225 million Source: Public filings, Internal data Notes: 1. Adjusted EBITDA less Capital Expenditures and Disbursements to Stakeholders is a non-GAAP financial measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. CASH FLOW PROFILE Q3 FY21 Supplemental Slides | June 17, 2021 10
$330 $300 $300 $400 2021 2022 2023 2024 to 2025 2026 2027 2028 to 2030 2031 26 66 150 397 $443 Revolver BALANCE SHEET STRENGTH U.S. Accounts Receivable Facility Poland Credit Facilities Poland Accounts Receivable Facility (US$ in millions) Revolving Credit Facility 5.375% Notes Cash and Cash Equivalents 4.875% Notes 3.875% Notes DEBT MATURITY PROFILE PROVIDES STRATEGIC FLEXIBILITY DEBT MATURIT Y SCHEDULE Q3 FY’21 LIQUIDIT Y (US$ in millions) Source: Public filings Q3 FY21 Supplemental Slides | June 17, 2021 11 Increased revolving credit facility from $350 million to $400 million and extended maturity to 2026
46% 42% 37% 33% 32% 24% 18% 21% 22% 20% 0% 10% 20% 30% 40% 50% 60% 3.9x 3.2x 2.5x 1.9x 1.6x 1.2x 0.9x 1.1x 1.2x 1.0x NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x Source: Public filings, Internal data Notes: 1. Total debt is defined as long-term debt plus current maturities of long-term debt and short-term borrowings. 2. Net Debt is defined as total debt less cash & cash equivalents. 3. EBITDA depicted is adjusted EBITDA from continuing operations on a trailing 12 month basis. 4. Net debt-to-capitalization is defined as net debt on CMC’s balance sheet divided by the sum of total debt and shareholders’ equity. 5. Net Debt to EBITDA and Net Debt to Capitalization are non-GAAP financial measures. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. LEVERAGE PROFILE Financial strength gives us the flexibility to fund our announced projects, navigate current economic uncertainties, and pursue opportunistic M&A NET DEBT1,2 / EBITDA3 Q3 FY21 Supplemental Slides | June 17, 2021 12 NET DEBT-TO-CAPITALIZATION4
Q3 FY21 Supplemental Slides | June 17, 2021 13 A P P E N D IX : N O N -G A A P R E C O N C IL IA T IO N S
3 MONTHS ENDED 5/31/2021 Earnings from continuing operations before income taxes $168,583 Plus: interest expense 11,965 Plus: Acquisition and integration related costs prior to acquisition close – Operating profit $180,548 Operating profit $180,548 Less: income tax at effective rate 40,804 Net operating profit after tax $139,744 Annualized net operating profit after tax $558,977 Assets $4,391,075 Less: cash and cash equivalents 443,120 Less: accounts payable 340,238 Less: accrued expenses and other payables 456,394 Invested Capital $3,151,323 Annualized net operating profit after tax $558,977 Invested Capital $3,151,323 Return on Invested Capital 17.7% RETURN ON INVESTED CAPITAL Q3 FY21 Supplemental Slides | June 17, 2021 14 ($ in thousands) Source: Public filings Note: 1. See page 20 for definitions of non-GAAP financial measures
3 MONTHS ENDED 12 MONTHS ENDED 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 2/29/2020 11/30/2019 5/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $130,408 $66,233 $63,911 $67,782 $64,169 $63,596 $82,755 $328,334 $278,302 $198,779 $135,237 $50,175 Interest expense 11,965 14,021 14,259 13,962 15,409 15,888 16,578 54,207 61,837 71,373 40,957 44,151 Income taxes 38,175 20,941 21,593 18,495 23,804 22,845 27,332 99,204 92,476 69,681 30,147 15,276 Depreciation and amortization 41,804 41,573 41,799 41,654 41,765 41,389 40,941 166,830 165,749 158,653 131,508 124,490 Amortization of acquired unfavorable contract backlog (1,508) (1,509) (1,523) (10,691) (4,348) (5,997) (8,331) (15,231) (29,367) (74,784) – – Asset impairments 277 474 3,594 1,098 5,983 – 530 5,443 7,611 384 14,372 1,730 Adjusted EBITDA from continuing operations 2 $221,121 $141,733 $143,633 $132,300 $146,782 $137,721 $159,805 $638,787 $576,608 $424,086 $352,221 $235,822 Loss on debt extinguishment – 16,841 – 1,778 – – – 18,619 1,778 – – 22,672 Non-cash equity compensation 13,800 12,696 9,062 9,875 6,170 7,536 8,269 45,433 31,850 25,106 24,038 21,469 Gain on sale of assets (4,457) (5,877) – – – – – (10,334) – – – – Facility closure – 5,694 5,214 2,903 1,863 – 6,339 13,811 11,105 – – – Acquisition settlement – – – 32,123 – – – 32,123 32,123 – – – Labor cost government refund – – (1,348) (2,985) – – – (4,333) (2,985) – – – Acquisition and integration related costs and other – – – – – – – – – 41,958 25,507 – Purchase accounting effect on inventory – – – – – – – – – 10,315 – – Mill operational start-up costs 1 – – – – – – – – – – 13,471 – CMC Steel Oklahoma incentives – – – – – – – – – – (3,000) – Severance – – – – – – – – – – – 8,129 Core EBITDA from continuing operations 2 $230,464 $171,087 $156,561 $175,994 $154,815 $145,257 $174,413 $734,106 $650,479 $501,465 $412,237 $288,092 ADJUSTED AND CORE EBITDA FROM CONTINUING OPERATIONS RECONCILIATION Q3 FY21 Supplemental Slides | June 17, 2021 15 ($ in thousands) Source: Public filings Notes: 1. Net of interest, taxes, depreciation and amortization, impairments, and non-cash equity compensation 2. See page 20 for definitions of non-GAAP financial measures
3 MONTHS ENDED 12 MONTHS ENDED 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 2/29/2020 11/30/2019 5/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $130,408 $66,233 $63,911 $67,782 $64,169 $63,596 $82,755 $328,334 $278,302 $198,779 $135,237 $50,175 Loss on debt extinguishment – 16,841 – 1,778 – – – 18,619 1,778 – – 17,799 Gain on sale of assets (4,457) (5,877) – – – – – (10,334) – – – – Facility closure – 5,694 5,214 2,903 1,863 – 6,339 13,811 11,105 – – – Asset impairments 277 474 3,594 1,098 5,983 – – 5,443 7,081 – 12,136 – Labor cost government refund – – (1,348) (2,985) – – – (4,333) (2,985) – – – Acquisition settlement – – – 32,123 – – – 32,123 32,123 – – – Acquisition and integration related costs and other – – – – – – – – – 41,958 25,507 – Purchase accounting effect on inventory – – – – – – – – – 10,315 – – Mill operational start-up costs – – – – – – – – – – 18,016 – CMC Steel Oklahoma incentives – – – – – – – – – – (3,000) – Severance – – – – – – – – – – – 8,129 Total adjustments (pre-tax) ($4,180) $17,132 $7,460 $34,917 $7,846 – $6,339 $55,329 $49,102 $52,273 $52,659 $25,928 Tax impact TCJA impact – – – – – – – – – $7,550 $10,600 – International reorganization – – – – – – – – – – (9,200) – Related tax effects on adjustments 878 (3,598) (1,593) (7,392) (1,648) – (1,331) (11,705) (10,371) (10,977) (13,236) (9,075) Total tax impact $878 ($3,598) ($1,593) ($7,392) ($1,648) – ($1,331) ($11,705) ($10,371) ($3,427) ($11,836) ($9,075) Adjusted earnings from continuing operations 1 $127,106 $79,767 $69,778 $95,307 $70,367 $63,596 $87,763 $371,958 $317,033 $247,625 $176,060 $67,028 Average diluted shares outstanding (thousands) 122,194 121,752 121,128 120,645 120,279 120,408 119,774 121,430 120,310 119,125 118,146 117,364 Adjusted earnings from continuing operations per diluted share $1.04 $0.66 $0.58 $0.79 $0.59 $0.53 $0.73 $3.06 $2.64 $2.08 $1.49 $0.57 ADJUSTED EARNINGS FROM CONTINUING OPERATIONS RECONCILIATION Q3 FY21 Supplemental Slides | June 17, 2021 16 ($ in thousands) Source: Public filings Note: 1. See page 20 for definitions of non-GAAP financial measures
3 MONTHS ENDED 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 North America Adjusted EBITDA from continuing operations $207,330 $171,612 $155,634 $174,219 $159,394 North America net sales 1,558,068 1,257,486 1,195,013 1,224,849 1,167,081 North America Adjusted EBITDA Margin 13.3% 13.6% 13.0% 14.2% 13.7% Europe Adjusted EBITDA from continuing operations $50,005 $16,107 $14,470 $22,927 $14,270 Europe net sales 284,107 202,066 194,596 179,855 173,817 Europe Adjusted EBITDA Margin 17.6% 8.0% 7.4% 12.7% 8.2% ADJUSTED SEGMENT EBITDA MARGIN Q3 FY21 Supplemental Slides | June 17, 2021 17 ($ in thousands) Source: Public filings
12 MONTHS ENDED 9 MONTHS ENDED 5/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 5/31/2021 5/31/2020 Earnings from continuing operations $328,334 $278,302 $198,779 $135,237 $50,175 $62,001 $58,583 $260,552 $210,520 Interest expense 54,207 61,837 71,373 40,957 44,151 62,121 76,456 40,245 47,875 Income taxes 99,204 92,476 69,681 30,147 15,276 13,976 36,097 80,709 73,981 Depreciation and amortization 166,830 165,749 158,653 131,508 124,490 127,111 135,559 125,176 124,095 Asset impairments 5,443 7,611 384 14,372 1,730 40,028 2,573 4,345 6,513 Amortization of acquired unfavorable contract backlog (15,231) (29,367) (74,784) – – – – (4,540) (18,676) Adjusted EBITDA from continuing operations $638,787 $576,608 $424,086 $352,221 $235,822 $305,237 $309,268 $506,487 $444,308 Capital expenditures and disbursements to stakeholders Capital expenditures 180,921 187,618 138,836 174,655 213,120 163,332 119,580 127,395 134,092 Interest expense 54,207 61,837 71,373 40,957 44,151 62,121 76,456 40,245 47,875 Cash income taxes 73,974 44,499 7,977 7,198 30,963 50,201 61,000 59,041 29,566 Dividends 57,583 57,056 56,537 56,076 55,514 55,342 55,945 43,295 42,768 Total capital expenditures and disbursements to stakeholders $366,685 $351,010 $274,723 $278,886 $343,748 $330,996 $312,981 $269,976 $254,301 Adjusted EBITDA less capital expenditures and disbursements to stakeholders $272,102 $225,598 $149,363 $73,335 ($107,926) ($25,759) ($3,713) $236,511 $190,007 ADJUSTED EBITDA LESS CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS Q3 FY21 Supplemental Slides | June 17, 2021 18 ($ in thousands) Source: Public filings Note: 1. See page 20 for definitions of non-GAAP financial measures
3 MONTHS ENDED 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2019 5/31/2019 2/28/2019 11/30/2018 8/31/2018 5/31/2018 Long-term debt $1,020,129 $1,011,035 $1,064,893 $1,065,536 $1,153,800 $1,144,573 $1,179,443 $1,227,214 $1,306,863 $1,310,150 $1,307,824 $1,138,619 $1,139,103 Current maturities of long-term debt and short-term borrowings 56,735 22,777 20,701 18,149 17,271 22,715 13,717 17,439 54,895 88,902 29,083 19,746 19,874 Total debt $1,076,864 $1,033,812 $1,085,594 $1,083,685 $1,171,071 $1,167,288 $1,193,160 $1,244,653 $1,361,758 $1,399,052 $1,336,907 $1,158,365 $1,158,977 Less: Cash and cash equivalents 443,120 367,347 465,162 542,103 462,110 232,442 224,797 192,461 120,315 66,742 52,352 622,473 600,444 Net debt $633,744 $666,465 $620,432 $541,582 $708,961 $934,846 $968,363 $1,052,192 $1,241,443 $1,332,310 $1,284,555 $535,892 $558,533 Earnings from continuing operations $130,408 $66,233 $63,911 $67,782 $64,169 $63,596 $82,755 $85,880 $78,551 $14,928 $19,420 $51,260 $42,325 Interest expense 11,965 14,021 14,259 13,962 15,409 15,888 16,578 17,702 18,513 18,495 16,663 15,654 11,511 Income taxes 38,175 20,941 21,593 18,495 23,804 22,845 27,332 16,826 29,105 18,141 5,609 6,682 13,312 Depreciation and amortization 41,804 41,573 41,799 41,654 41,765 41,389 40,941 41,051 41,181 41,245 35,176 32,610 32,949 Asset impairments 277 474 3,594 1,098 5,983 – 530 369 15 – – 840 935 Amortization of acquired unfavorable contract backlog (1,508) (1,509) (1,523) (10,691) (4,348) (5,997) (8,331) (16,582) (23,394) (23,476) (11,332) – – Adjusted EBITDA from continuing operations $221,121 $141,733 $143,633 $132,300 $146,782 $137,721 $159,805 $145,246 $143,971 $69,333 $65,536 $107,046 $101,032 Trailing 12 month adjusted EBITDA from continuing operations $638,787 $564,448 $560,436 $576,608 $589,554 $586,743 $518,355 $424,086 $385,886 $342,947 Total debt $1,076,864 $1,033,812 $1,085,594 $1,083,685 $1,171,071 $1,167,288 $1,193,160 $1,244,653 $1,361,758 $1,399,052 $1,336,907 $1,158,365 $1,158,977 Total stockholders' equity 2,156,597 2,009,492 1,934,899 1,889,413 1,800,662 1,758,055 1,701,697 1,624,057 1,564,195 1,498,496 1,489,027 1,493,583 1,452,902 Total capitalization $3,233,461 $3,043,304 $3,020,493 $2,973,098 $2,971,733 $2,925,343 $2,894,857 $2,868,710 $2,925,953 $2,897,548 $2,825,934 $2,651,948 $2,611,879 Net debt to trailing 12 month adjusted EBITDA from continuing operations 1.0x 1.2x 1.1x 0.9x 1.2x 1.6x 1.9x 2.5x 3.2x 3.9x Net debt to capitalization 20% 22% 21% 18% 24% 32% 33% 37% 42% 46% Source: Public filings Note: 1. See page 20 for definitions of non-GAAP financial measures NET DEBT TO EBITDA AND NET DEBT TO CAPITALIZATION RECONCILIATIONS Q3 FY21 Supplemental Slides | June 17, 2021 19 ($ in thousands)
DEFINITIONS FOR NON-GAAP FINANCIAL MEASURES ADJUSTED EARNINGS FROM CONTINUING OPERATIONS Adjusted earnings from continuing operations is a non-GAAP financial measure that is equal to earnings from continuing operations before debt extinguishment costs, certain gains on sale of assets, certain facility closure costs, asset impairments, labor cost government refunds and acquisition settlements, including the estimated income tax effects thereof. Adjusted earnings from continuing operations should not be considered as an alternative to earnings from continuing operations or any other performance measure derived in accordance with GAAP. However, we believe that adjusted earnings from continuing operations provides relevant and useful information to investors as it allows: (i) a supplemental measure of our ongoing core performance and (ii) the assessment of period-to-period performance trends. Management uses adjusted earnings from continuing operations to evaluate our financial performance. Adjusted earnings from continuing operations may be inconsistent with similar measures presented by other companies. Adjusted earnings from continuing operations per diluted share is defined as adjusted earnings from continuing operations on a diluted per share basis. CORE EBITDA FROM CONTINUING OPERATIONS Core EBITDA from continuing operations is the sum of earnings from continuing operations before interest expense and income taxes. It also excludes recurring non-cash charges for depreciation and amortization and asset impairments. Core EBITDA from continuing operations also excludes debt extinguishment costs, non-cash equity compensation, certain gains on sale of assets, certain facility closure costs, acquisition settlement costs and labor cost government refunds. Core EBITDA from continuing operations should not be considered an alternative to earnings (loss) from continuing operations or net earnings (loss), or as a better measure of liquidity than net cash flows from operating activities, as determined by GAAP. However, we believe that Core EBITDA from continuing operations provides relevant and useful information, which is often used by analysts, creditors and other interested parties in our industry as it allows: (i) comparison of our earnings to those of our competitors; (ii) a supplemental measure of our ongoing core performance; and (iii) the assessment of period-to-period performance trends. Additionally, Core EBITDA from continuing operations is the target benchmark for our annual and long-term cash incentive performance plans for management. Core EBITDA from continuing operations may be inconsistent with similar measures presented by other companies. ADJUSTED EBITDA FROM CONTINUING OPERATIONS Adjusted EBITDA from Continuing Operations is a non-GAAP financial measure. Adjusted EBITDA is the sum of the Company's earnings from continuing operations before interest expense, income taxes, depreciation and amortization expense, impairment expense, and amortization of acquired unfavorable contract backlog. Adjusted EBITDA from continuing operations should not be considered as an alternative to earnings from continuing operations or any other performance measure derived in accordance with GAAP. However, we believe that adjusted EBITDA from continuing operations provides relevant and useful information to investors as it allows: (i) a supplemental measure of our ongoing performance and (ii) the assessment of period-to-period performance trends. Management uses adjusted EBITDA from continuing operations to evaluate our financial performance. Adjusted EBITDA from continuing operations may be inconsistent with similar measures presented by other companies. ADJUSTED EBITDA LESS CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS Adjusted EBITDA less capital expenditures and disbursements to shareholders is defined as Adjusted EBITDA less capital expenditures less interest expense, less cash income taxes less dividend payments. NET DEBT Net debt is defined as total debt less cash and cash equivalents. RETURN ON INVESTED CAPITAL Return on Invested Capital is defined as: 1) after-tax operating profit divided by 2) total assets less cash & cash equivalents less non-interest-bearing liabilities Q3 FY21 Supplemental Slides | June 17, 2021 20
THANK YOU CORPORATE OFFICE 6565 N. MacArthur Blvd Suite 800 Irving, TX 75039 Phone: (214) 689.4300 INVESTOR RELATIONS Phone: (972) 308.5349 Fax: (214) 689.4326 IR@cmc.com Q3 FY21 Supplemental Slides | June 17, 2021 21