CMC - Earnings call transcript Q1 2018 | Commercial Metals Company

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Operator

Hello, and welcome, everyone, to today's Commercial Metals Company First Fiscal Quarter of 2018 Earnings Call. Today's call is being recorded. [Operator Instructions]. I would like to remind all participants that during the course of this conference call, the company will make statements that provide information other than historical information and will include expectations regarding key macro economic drivers that impact our business, our margins, refinancing plans, the exit from our International Marketing and Distribution segment, the company's future operations, the company's planned new steel mill in Oklahoma, capital spending and the company's planned acquisition of certain U.S. rebar assets of Gerdau S.A. should, be or phrases estimates, or management, to, could, can the as intends, phrases. generally outlook ought, CMC, potential, company, expects, will, statements identified similar such by we, plans or These other appears, words likely, anticipates, believes, securities subject actual These federal expectations. to from uncertainties could statements cause risks to meaning similar involve differ these may other considered forward-looking and and and the speculation results materially within are of laws and are that expectations beliefs that latest and Factors based company's in conditions, the are subject risks the current annual Risk reflect certain but Form XX-K. uncertainties, statements These company's and on section of the are on report to those including described

believes that expectations are statements on no that to CMC any forward-looking we beliefs are assurance place such offers on to reasonable, listening those reliance these and or this as expectations expected, based call happen statements. events, company not law, facts and CMC caution circumstances will events only All changes current the and anticipated by Although update, the management's beliefs, and assume future obligation any statements connection as not otherwise. amend unanticipated or with occurrence as date. to Except assumptions, in statements or events, of clarify does new required these this information in are or or of made undue

the Smith. and the Ms. Unless the quarter, opening website. can such the Some in Commercial Executive numbers company's discussed year or otherwise, the or or presented fiscal or And financial respectively. made now, call measures be President introductions, to fiscal found Barbara numbers Officer on Chief quarter will remarks Company, earnings year of will I reconciliations for all be and to references first and non-GAAP Metals company's turn company's over references release stated to are for first

Barbara Smith

detail. Financial quarter our Officer. Afterwards, with on will after Vice results then joined the and Thank everyone second Chief will questions. conclude morning, us highlights remarks cover our to Mary review will from comments President Lindsey, our by I I information in Mary call Senior you. XXXX. outlook of to XXXX for review welcome which we I'm our more and quarter and the the first open quarter joining prepared quarter Good financial the to will Today, some

results acknowledge the Before number covering quarter, a year Harvey, our Irma of with not California. devastating the Hurricane of want Hurricane natural only the which wildfires disasters, the business in for our I to followed began impacted our by recently, more that employees, impact and but fiscal

impact our still and as every some like business time acknowledge CMC events and suffering. property would was who who the are minimal those damage, impacted lost While not was lucky. employees employees by to were I

continue their recovered we they We can fully loss. have employees from to until assist where

quarterly morning. XX, as continuing will quarter per results diluted $X.XX release of XXXX. quarter reported the and dividend of announced cash stock on the our for share results quarterly fact, these quarterly earnings dividend net release in per CMC's of dividend in earnings our consecutive I'm common with of to $X.XX Directors cash paid Also reflects stockholders on XX, be our a regular since best on of noted This press January Turning first dividend. sales fiscal billion X, as XXXth $X.X Board and posted performance of The our this We XXXX. were XXXX. XXXX our CMC million in declared operations pleased January or for our record $XX.X very share. first net January our

in Now which we current and I in conditions markets cover trends will operate. the

and steel our led are markets confidence, and investment of exhibiting strong momentum results developing strong our first by quarter year. global increased in economic in for the economies advanced in XXXX, prior X% and U.S., consumption growth XX% fiscal to starts calendar almost construction In a have comparison XXXX. sentiments of growth the year-to-date of in XXXX. optimism are Continued Both forecast November nonresidential as driving

leading XX nine of their months, indicator for of are merchant Original construction and growth has Index, the the the Additionally, business. energy for should that and strength past supporting above their equipment of of been farm activity, eight Billings providing continued growth seeing equipment construction in manufacturers construction also equipment, Architectural markets industrial a continue. confidence products

the market ramp construction of Specifically Oklahoma to the North going looking up Durant serve strength of facility and activities, nonresidential recognize be well. Texas to We've U.S. micro we the chose for forecast. we market of the location mill, our starting the is to by commissioning ramp part as starts major XXXX in our of construction in this all market, report Texas the as this completed #X measured extremely We soon pleased commissioning market. the the that at very will facility. I'm production when is

of year. this spooled the during production the commission spring to look we rebar addition, In of

to our spooler to announced in also at a United we additional rebar will quarter, our Arizona, second Southwestern the high-quality beginning intention States Mesa, in serve XXXX. mill spooled micro This provide invest which in

by market Turning construction experiencing In XX% year, significant Polish prior markets, to comparison European is and by increased XX%, industrial to building by growth. XX%. also housing has the products the the construction

capabilities team, invested few results. improved very operations Polish successful in we've years, we that producing significantly structure cost over our past capital facility combined fantastic with at the our and and have our our are the With

corrosion-resistant our assets specific MMFX relatively of to of was rebar capability ChromX it their the line. enhance the product the small, reinforcement to commitment acquisition innovative production network distribution range the solutions growth of requirements. demonstrates of offers coast-to-coast of The customers and bringing MMFX the our and CMC's to that will industry. suit We concrete solutions believe Technologies Although greatly line an building additional products high-strength, cost-effective

to and portfolio we've In to CryoSTEEL the solution also our adds low line, customer reinforcing product This generally further for extremely offerings. addition use rebar. introduced concrete is ChromX the of in temperature, applications

over discussing first customers other the use with Financial Vice and applications to our will with Lindsey, this Senior discussion and secured potential around I its recently as Mary an various that world. have With Officer. We Chief now order the are product for President turn overview,

Mary Lindsey

you, and Barbara, call. joining us everyone to morning on good Thank the

increasing the prices for the the approximately in was benefit the were resulted highest $X.X for compares segment, first share, our Summarizing the the continued their stable adjusted increases the a excess pricing. this the and the resulting in XXXX years profit been Marketing liquidation have in This mentioned, is demand of during scrap by $X.XX related results to very Americas per this carrying $X.X exit net nonferrous segment. net of This as values. strong Recycling for the after-tax primarily first quarter, diluted prices in of earnings of for of and of Distribution ferrous diluted supported International quarter, and XXXX of profit Since business. have values the in of to XX%. segment year, period inventory five increased net -- million the which or of results by our segment same million for from reported million included operating $X.XX quarterly past in results million we months. Barbara relatively share Ferrous first earnings prior $XX.X quarter As per prior in year, nonferrous the $X.X XX quarter or strong,

combination acquisition manufacturing rates year. prices we see beginning to to trend of the A led and are the XXXX during by yards higher domestic steel utilization shipments the XX% upwards. However, same fiscal period of increasing of compared to fiscal prior

the our million adjusted Mills profit profit segment recorded for period $XX.X same XXXX. Our operating first million fiscal of to for operating adjusted $XX.X in Americas XXXX compared quarter of

the market After same of decreasing As Barbara mentioned, when margins throughout shipment prior year. resulted flat previously by for demand year. X% volume fiscal the to quarter returned strong level XXXX, in first almost prior to the compared was end essentially a that the period metal of increasing

an loss for demand to Our operating with XXXX. adjusted to States. a jobs of $X.X customers in in by segment the first unto selling comparison in and $X.X material low-cost competitive of XXXX. import not of of fiscal Strong cost materials the quarter combined profit the million of decrease for United be adjusted margin Americas strength was pressures the the supporting million form operating for remained this market by first of quarter quarter dynamic for compares new provided used caused to our for prices. the adjusted XXXX. in selling for due The passed primarily profit of recorded decreasing to the compression activity slightly raw This fiscal the fiscal of these prices, increases steel have segment, availability first operating optimism Fabrication increased continued costs increased Bidding strong,

adjusted operating operating $XX.X adjusted of of due strong in merchant over for quarter adjusted demand million another construction profit International by primarily versus had we the Mill with of and and our increase in million, segment margins more XX% the XXXX. first million XXXX comparison quarter Barbara operating As in quarter approximately for This product higher mentioned, year the to of the improvement $XX.X profit $XX metal prior first strong in steel. volume to was driven an profit

Marketing the and on make International of wind good to the Distribution continue We segment. down progress

of Cometals, you CMC completed materials August are As our aware, of sale raw XXXX. the we division, in trading

In selling business. the progress down winding U.S. trading made the trading steel of most of Cometals considerable operations continuing remaining steel. in steel Asia for market we Australia, are to sale have wound Southeast business, We and or have down portions the

liquidity. balance to and sheet Turning the

our anticipated, were the we the to proceeds funds last us repayments from the received CMC sale allow of million Cometals program. of consumed to accounts approximately accommodate at of year-end delevering year. related primarily $XXX the to advances securitization to receivable As bridge quarter, These accomplished we receipt utilized during cash

remains of healthy sheet optionality. Our significant balance comprise and

As and million. sales and $XXX and approximately cash totaled our million of $XXX.X under cash facilities equivalents November XXXX, accounts credit availability totaled XX, receivable

prior interest in include refinancing, construction million, spending accomplished to We range for the quarter mill. mill, related capitalized our a As a note will XXXX our new costs of interest related of our of the will and first which year's year. compared million expenditures to $XX the that capital the of half to Durant quarter. our last XXXX in less which be expenditures $XXX were to for result $XXX Oklahoma million prior the first million estimate some $XX.X you that than year Capital were we

tax beneficial to the like a signed on make comment to in the that We on U.S. will recently Commercial lower would corporate the a rate legislation. go-forward I basis. reform Finally, believe Metals be

some how to you cash much very outlook. revalued costs reduced of this much. expect impact this it are repatriation Barbara impact the the liabilities for the is to we too over early net are I'll rates Thank it back However, know now be. time, and tax as at At will determined. the turn the

Barbara Smith

Mary. you, Thank

quarter shipping and the construction to to weaker activity. a typically slow is due the quarter winter second conditions Our potential for holidays

However, strength our leading markets U.S. both the we indicators end enter fundamental of as of our key in and Poland. markets continued towards the points XXXX end

the signed should improvement economy. U.S. mentioned, results, but tax to growth continued As reform Mary support recently the modest provide legislation for the our more of importantly, provides a

reform announced addition, is with a in U.S. that during for Metals S.A. badly In acquire Commercial the the in have our address as to definitive tax provide assets recovering time are historical Demand Company. to will program. a certain This signed year we this exciting we strong, U.S. And needed Gerdau we business foundation in of rebar of margins a fiscal are lows in XXXX. focused segments a place, very the for encouraged our administration regeneration infrastructure from all is agreement the experienced yesterday,

on like a committed innovative We by merchant the in thanking continued conclude our choice concrete for and commitment the our to and and commercial and steel of leveraging being technical, call of to all new wish employees suppliers happy everyone prosperous and strength. a bar and markets, and year. dedication would I supplier our their loyalty are customers reinforcing the

Operator

[Operator Instructions].

question first comes with from Bank. The Deutsche Chris Terry

Christopher Terry

think The consultant of the guess, Just we that numbers the a market see mixed question do we of the I less. or first do that some slightly you the, I effect? -- quarter, on of course as a price that was division. against moved obviously during to prices Is rest saw, Polish over how guess the XXXX? effect the but about lag a developing up that And nicely

Barbara Smith

we've my I have seen Yes. our the not quarter, margins just demand don't but you're referring our what general, We that as the to. Chris, of know do top mix my off of -- to sure I'm both mix of within construction merchant in specifics strong related head to references well as steel. the improvement in

-- you're I pointing what just guess would to. don't I references So I know

Christopher Terry

we results that up data consultant They the obviously a get of over well. little some that than were. that the Just indicated moved was it higher period what just

Okay.

what's for sort that do of of throughout see terms division the Or continuing 'XX? in pricing? So you that the outlook

Barbara Smith

so fiscal good while be Polish specific we little demand very for general several pricing for demand. and have we next optimistic a Poland nor Well, but in battle to we Obviously, strong we're a good winter for do pricing, We're very weather but weather, the seasonally, very it shipments, guidance, a year operations optimistic and in see our do continue projections in disrupted bit demand the at to year. Polish see continue strong by winter will our quite don't give give we economy point that and could specific this we years. they

Operator

Jefferies. with The next question Rosenfeld comes from Seth

Seth Rosenfeld

significant amount nameplate where or out it material effect kind that a on seeing previously? shipped assets capacity production like look two at is for there? you've you're those the alternately, Or there the consecutive there being built from International of quarters. a follow-up inventories line exceeded again Mill that with In in mixed of this was today? of Or division, was segment. a seems When significantly have business, you I rolling Polish question

Barbara Smith

limits I assets. have they And that in and in with of productivity line the -- further we're ways those asset. in and we can improve testing think what Poland the the debottleneck looking equipment. team good fabulous the constantly always seeing is they're steelmaker it's and a production efficiency at of the Any

Poland million But X.X tons. remind is on. that, particularly there's you, capacity around stated nothing other than going in to the unusual Just

Seth Rosenfeld

realized follow-up costs some outlook the in Mills segment, us your last was made a give looking over division? the of as kind just you can quarter little look for bit the figures elevated. how confusion and bit that And the of costs question, Okay. color over Americas there just Remember impact costs a on conversion conversion a reported scrap more

going do last this for conversion where your realized into quarter expectations you For lying? and 'XX, see calendar costs

Barbara Smith

I consistent conversion quite remain think costs the quarter-to-quarter. from

we during quarter. for quarter noise experienced is the calculations So not the that the should conversion your next -- fourth scrap affect regarding not

Seth Rosenfeld

Okay.

So Q-over-Q of realistic most going pretty couple being which look the we rate recent this stable run as into quarters? should at next

Barbara Smith

Yes, so. say I would

Operator

The next from question with comes KeyBanc Capital Gibbs Markets. Phil

Philip Gibbs

any networking of the very expect is Question unwind capital, what we when should the we stand the the some and you had to on of expect business that second and the where also, quarter of you've business? to the roll or IM&D quarter. a in revenues on whether timing think And not off of then you the in got that move fact as strong that well yet obviously given

Barbara Smith

Yes.

Phil. thanks, So

of to probably in the have to left million $XX million in we've We going had going we're our so that we're capital success first third quarter to, some certainly going from frankly the another $XXX business, completed, to than we working And the completed of well. that of see about of we monetization seemed relatively year that fiscal when better very realized got the we by we've quarter. thought And go. hopeful we would $XXX things see that to be million terms be and

Philip Gibbs

to or the of And the and not whether had quarter, in your while. your cause best expect one that you've it result what on should curious of was continue I'm -- best QX. adjusted clearly, the And quarters was, better that in results a quarters, we into

Mary Lindsey

announcement steel that -- of -- inventory. last a IM&D. And charge so significant we portion the yes, the one was mark-to-market significant making Well, associated of relatively exit in those the had remember the a of quarter fourth you if charge of Cometals to the with year,

that we price. as so having price. got than it are, are I higher market the then good pretty as success And markdown liquidating we're values And liquidation inventory. mentioned, the mark-to-market that And

So have this gain assume we And of $X continue benefit earnings it's, for third million the I about to liquidating assuming and think you in probably continue That's the running a ratio we net level. quarters. million inventory, as $X.X second success similar quarter. can through EBITDA at of good about

Philip Gibbs

has forward? perspective, to Is from million And interest housekeeping nicely, you $X.X that. appreciate a good pulled a I back noted. the Okay, way the as moving expense been use

Mary Lindsey

because little capitalized expense in that a interest bit of got of with associated frankly, things. some a low, couple It's Durant. We've number

gets So then once running we the take that through interest -- once XXXX. and the expense up about Durant $XX of for to full begins run year million We're seeing of P&L. expense

Philip Gibbs

direction, on based into into move the back question yesterday you last you starting Barbara, black? fabrication, noted right visibility that anticipate then, as And and When that getting your in see Okay. is we -- today. backlog slowly would on

Barbara Smith

Yes.

to So raw that's material go predict. on difficult a prices where from bit here. It depends little

And starting with chasing pricing, the the news been curve and that is so to but And is as price has rebar material commensurate adjust good last up. you raw had stabilized the material changes. it fab know, up raw months several it's with pricing prices moving

So backlog time, would take have margin quarters projects with I to several them. say, some replenish the business, the into some the fab it'll that built

can't parts I with that rebuild so because margin right but now, a some in going many give there's just some moving it. better to this to backlog Sorry, take time is prediction

Operator

from Bradford comes The Bradford next with Research. question Charles

Charles Bradford

come of cost figure building for a you the up with Durant? Could final maybe

Barbara Smith

about the you capital talking Are cost?

Charles Bradford

Yes, capital cost.

Barbara Smith

Yes.

mill. you from shop, recall post that. the number. -- million originally We we added, mill coming announced the had separate think at $XXX the coming is we I But million projects that would it's automated in and $XXX spooler that some which the for subsequent be around if

Charles Bradford

had you these think mentioned pick what's other area, able which scrap, scrap from new your Are like mills? other look Lauderdale your are Gerdau one supplies Or to own supplies supply to scrap the plan? scrap. existing be I you the mentioned as to going up only is I what its And yesterday, Fort facilities? with

Barbara Smith

Yes.

first this any arrangements facilities. Chuck, of own that place their any will uses are all, time, supplier have recycling with and pursue we Obviously, that see then these recycling want issue move of we order these the footprint, increase Gerdau is close we our to regulatory of and number to captive strategic think the and sourcing to to in we moves in process raw complete and supply. operate to through So but to not mill transaction will over and material in I facilities. operations support it, make additional to additional might order and business to don't whether examine any supply we our There new begin will scrap assets get determine scrap today strategy what or first

Charles Bradford

what's your you about any close would ability update deal? on in have Do the have its regard anything any and know to impact investigation? Gerdau And happening or that to

Barbara Smith

customary It a closing from us prevent topic requirements. than don't don't regulatory normal me would inappropriate anything comment to really on related Gerdau. the be would We completing anything that additional and see to for other We see the transaction.

Operator

from comes question Korn with next Matthew Goldman The Sachs.

Matthew Korn

So wondering, they're healthy, prices deep scrap get I'm flows, segment, very, regarding that have a better trending, are results. a very really can upward bite recycling freeze you hampered this although any good bit. much maybe the when seemingly question has conditions hasn't weather

see do the good the a it So your you business? of as margin is of a business gets? we for -- this X% kind as X%, this as operating achievable -- part through something Or for could think

Barbara Smith

her profits our scrap recycling as that's segment generate certainly, pricing an better conducive has and segment. trending this in environment results remarks, in Well, is been to Mary up indicated that and to is the always in that objective clearly,

big other into the lot content nonferrous nonferrous yards comes extracting and a and are amount value. for of sell effort care every pricing we that of we factor in take our and recycling think I that

up, segment. commodity nonferrous the Those the fact have the really around for moving opportunities economies in recycling commensurate recovering prices off the prices with profitably have of and And a been globe lows. so to us then that better multiyear improve of are lot

indicate the that the I term. say would prices lower so see those that don't would near move to going pricing, And nonferrous I are anything in

of good a in I indicator results think that's the good continuous So segment.

Matthew Korn

follow commissioning, by we're like are well, into me up going on also it. Got And Durant. It let sounds things XQ. contribution

aiming you're So of seemingly the it's with about is market in order are nonres, volume there, next couple stronger, better, everything conditions getting of falling, you ramp what over for from of terms kind talking Durant else years? imports

Barbara Smith

question team assets working these forward, on been the We for be Durant. with to and there both to online. moving more the a how have up pleased construction the commissioning the operating team, the who activities you and could Thank team just out shout not Yes. tirelessly, give I bring are want to

of bring off odometer, engine salable very steel that slowly. Our brand-new heat is you the quite if the analogy to mill. sports in car, engine cautioned a XX like, miles which when product, commissioning first that use warm I on was with or the drive commercially unusual up the you're But fine speed lot up to of if a to

will that allow to crew we frame. by fourth would get expect strong controlled XX,XXX to, ramp XX,XXX And be nameplate by So crew. weeks then to, per I the commissioning to demand in I would I around staffing this time said call way. think indicated, be May-June when we're very we to would to through XXX,XXX indicated, we going determine earlier up that, market three add we around next had up per month frame. that will say, the We tons should the the having continue month it crews, to and we're a the and the we work a prepared expect time tons time, of limits But that that and year. number say few we these to to ramp would per test equipment that would the over at us But fourth tons May-June

Operator

next Macquarie. with [Operator question Lipschitz Instructions]. David The comes from

David Lipschitz

the on A quick scrap. question

the the Americas prices quarter. really a said felt, to that two, in next we number, good Poland? scrap up, going realization up I expect and -- in both first you for in scrap your had quarter You your scrap move But are should or

Barbara Smith

for are scrap, for early month But for think affect going. organizations indicated. continue I what's to in to trade that this pricing January traded factor are where market its market for scrap of also the scrap. too for really has conditions to determine movement Winter scrap everybody say, trade some is another of there to to indications we've Generally, things. ability Well, some in the indicator I scrap it's good would so scrap of Dave. of can to going giving iron happen January. can be going But as that price the I to the the be monitor make been that's that prices Yes, week, tends weighs way which are ratio that think should into market, ore to scrap a supportive

David Lipschitz

a ops? discontinued follow-up, terms -- marketing can in how quick the of business, And that

Barbara Smith

your question? I'm sorry,

David Lipschitz

a -- down. market, you about profit. operations in international you business, wondering when like how discontinued quarter, it not you million the that's the marketing, nice it job come talk $XX the did winding I'm getting So selling marketing in said, of operating or just

Barbara Smith

the for or putting Well, accounting have discontinuing changed. for sale the something rules, rules ops into held

regard discontinued they're treatment the and for August. the their and those end that of go International wind-down only sold our Cometals business, end actually trading, Marketing period. to when Marketing ops of the International And qualified pieces at part into at we So of Trading the remaining actually the of which was will Trading, with

Operator

The from with Mazzaferro question next comes Mazzaferro Research. Aldo

Aldo Mazzaferro

raise I fabrication see now is and But how could maybe some fabrication further demand rebar I'm of How capacity plans that the Trump's raise now the And now the affect President that think you with that? wondering allow likely tax come about market -- you would be that overwhelm behind issue, us. back wondering to up. I infrastructure was might cost I positively, that you I'm price wondering, questions. wondering to about it can seemed more well. the and see to ramped might see as especially be two quite do could got do on on added you're you've rebar I I'm side, how that whether side the

Barbara Smith

Aldo, comment or to Yes. terms are where again, not going going on prices fab we're of in mill.

would speculating that right now. be think best I at

encouraged President his was is items think is plan. infrastructure up the to is would indicating at tax say the what I agenda -- that that one and next of we're reform look I next or that on item highly a the comprehensive passed,

across encouraged we've agenda. there number about now, very evidence is U.S., that and that common have we overwhelming something up aisle a can for the talked And that that's the of we're that sides moving here hopeful As a need we're get the so accomplished. and they that on years of both goal

demand. demand, Generally, of increase would that those I and demand plenty operations. welcome fabrication a and they that say excellent be opportunity meet increased it perspective and running from country and in are increased forward would to plenty just XX/X, think creation. something I there's be that not job throughput helpful can there's going so would the really to we the of for flexibility side, on

Aldo Mazzaferro

a January, role you Is possibility if singled gets in ask that on time I in question product Section the we're And there of and the XXX now potentially national characterization rebar another could as or Great. a some do that topic, that see we're current you out expecting included the of a more becomes think? that, of do interest? rebar a significant middle

Barbara Smith

I President, the Aldo, report there's time will will the that President the to to have read, then what make and report deadline that case. is President, need a I I and some Wilbur to be that up think that thing provide delivered that the will is you've only statutory can to that a Ross coming say shortly the and think decision around

be on flowed period been and of make really This to able just I time. gone had that, not any would a Beyond I think thing long predictions. for

to So it be this juncture. any predictions make difficult would at

Aldo Mazzaferro

be surprised that very if the finally, high capital. something very was the that about assets I a $XXX Xx looking capital, to it's able Great. the you that numbers, And they Durant Gerdau's ton And just of use a the I acquired paid Barbara, in congratulations like for price. think you're on of technology. admittedly really that then think strip I'm and good very, you mills. low working the price were at way very, you off spending paid for at I

Barbara Smith

Thank you, Aldo.

we I getting the those and through commercial a process to to forward getting look employees mills. think and into closing welcoming

very we're about Thank so you. possibilities. excited And the

Operator

[indiscernible]. The next question from comes

Unidentified Analyst

Most of have asked. questions my been

period of times. in country terms of had by the the a time number shredders we increased -- three where of about In

In terms see going demand, right market do you where the of supply forward? scrap and now

Barbara Smith

our business. a assuming the that's independent as any recycler, for demand I continued good recycling environment, Well, own any improving -- recycling think as well business

think the that improving materials globally for for strong environment fact think domestically. going So as well raw globally, economies to demand and as you I really an I see create that's

And referred capacity should which and be that is good you rate utilization have realization, the for that industry. a to to so higher excess overall able

Unidentified Analyst

And you utilization end do where of is recycling the it on side? the And follow-up see your XXXX? going the is, where by

Barbara Smith

plenty we own We don't opportunity But specific that's portion recycling similar of throughput our of yard. Again, think we utilization see rates. fab, to publish if have to a again, you recycling demand it's will, you recycling and for portfolio. the of good our capacity, our the internal increase environment in good

Operator

Wayne from comes question Atwell next with The Ascendiant.

Ralph Atwell

not yet? of your thoughts Florida, Is that serious the be guess, I gotten important? on guessing on it? of in Unfortunately, there's lot Texas you important, had Rico unfortunate, year. impact to have a to those I it down underway Can actually that storms, your question. communities. What's Puerto very I'm give rebuilding It's the Is have a two last and going road? us we three, business? Has sort but

Barbara Smith

Yes.

to rebuilding in than where material don't here across devastating, meaningful quick, some in years. a share was an So our regions some of to take seen in demand, recovery devastation could property and have slightly those some process. by change storms storms. U.S. there received areas, probably on yards was going the It'll X recycling flows was flow probably having but first the X can the increase owned go several material and that will of multiyear, impact be it Puerto Rico higher in be lion's areas, The just in personally was the so be to I enough through But lived fairly hurricanes, and were scrapped And that damaged know those is more demand the devastation. the from oceanfront storm. into to it's process, that we've the that which of rebuilding

it increase will some be across again, demand, of but pool spread a in it'll larger So be demand.

Ralph Atwell

So not like it's a period? sounds impact it onetime to in going terribly any meaningful have

Barbara Smith

new Not new a demand. or steel rebar on demand, construction no,

Operator

follow-up Phil The KeyBanc Markets. next is a question with Capital Gibbs from

Philip Gibbs

whether in segment the have the or I've corporate, then been and have got start-up may this they may on a costs on those realized this quarter, where Durant been. what and in P&L question

Barbara Smith

Yes.

sorry, I'm the maybe -- should her I'll they I So the give let specifics. answer question. Mary let

over or will So and up SG&A? into the in XQ you probably flip fiscal went that amount But have that's in showing still SG&A, XQ. do

Mary Lindsey

Yes.

is will was quarter. SG&A. that that's and So the flip number this mentioned, sold of cost quarter, it run a rate, quarter. Barbara rate, the of high goods not mix or X.X for extraordinary the run some for a as third And the was Phil, run It during than million little occurred that a about items that But rate. quarter, into higher that $X.X second in

Philip Gibbs

And the segment? in Mills Americas was that captured

Mary Lindsey

exactly. Yes, Mills, Americas

Operator

Sean Deutsche next Wondrack question with comes from Bank. The

Sean Wondrack

you Turkey Can the kind is side what outlook you've bit there? particularly about out what a your been seeing on talk import and little of of

Barbara Smith

bit late. been really characterize way imports and best of The quiet pricing So it, domestic to have import above think is still I pricing. across-the-board a

costs. of material any think are I there number their raw factors,

seeing this several we're mentioned times the economies call, globe have recovering. the I As on around

natural country products distances. so keep going is their that extra paying transporting longer costs if a in to economies And natural associated rather with thing, and home markets better like have than importing the elsewhere, you Turkey

the seeing change So an improving effect monitor we just and some quickly ongoing economies closer them to globe general of respond I home around think natural just we're to can numbers accordingly. market. continue But basis those staying and on its products and

Operator

you. appear Smith, there call over to be I'll no time, turn this At questions. to further back Ms. the

Barbara Smith

investor all Thank conference forward for of Thank during the on Gary. speaking with We today's joining you. coming weeks. you to you, visits look us Thank you our in call. many

Operator

today's concludes Company This Metals Commercial call. conference

now disconnect. may You

Commercial Metals (CMC) 3 Jan 182018 Q1 Earnings call transcript