CMC - Earnings call transcript Q3 2018 | Commercial Metals Company

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Operator

Hello, everyone. And welcome to today's Commercial Metals Company Third Fiscal Quarter of 2018 Earnings Call. Today's call is being recorded. After the Company’s remarks, we will have a question-and-answer session, and we’ll have a few instructions at that time. 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 macroeconomic drivers that impact our business, our margins, refinancing plans and exit from our International Marketing and Distribution segment and Company's future operations, the Company's planned new steel mill in Oklahoma capital spending, the Company's planned acquisition of certain U.S. S.A. Gerdau of assets rebar appears, These statements we, believes, phrases as should, identified intends, words other or phrases. can Company, CMC, be likely, will, the could, anticipates, to, by outlook or or plans similar such ought, generally potential, management, estimates, expects, expectations. and statements cause risks to these forward-looking materially and that could are These results within federal to of from subject meaning other and and laws are similar actual differ securities may considered the involve speculation uncertainties These expectations to current risks that statements Company's Company's conditions, Report Form but Risk and those latest on reflect beliefs based the on the XX-K. the and including section in are certain are of Annual Factors subject described uncertainties,

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

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

Barbara Smith

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

ingenuity costs, quarter, focus Before months. I benchmarks three their customers quality, we new the customers to as stakeholders safety. superior as value tenet results key on culture cultivate our want and at of our CMC we that recognize laser operations, the Commercial and unique The setting various the Across and Metals. entire covering for maintaining a team here service for performance creating on to the our well of our is are over while the our outstanding our for productivity for past focus people

results net same third the announced the to the we XX% of year. prior release XXXX, $X.X our in quarter earnings morning, which an as from of for our sales increase period Turning represents of billion this reported

third our per the the in share per of $XX.X $X.XX share, to quarter from the diluted of per prior adjusted million comparison during million Our operations or $XX.X while $X.XX period share diluted year. XXXX were earnings operations from continuing or million continuing $X.XX same in were $XX earnings or diluted

the Also declared the yesterday, Recession. Board June a the CMC’s morning, This paid quarterly As dividend on $X.XX indicated July cash highest of of dividend operations CMC will Great as reflects from cash XXXth of press stockholders for in common quarterly Directors X. per our adjusted The press was dividend share XX, stock record dividend. July XX. consecutive regular on be of noted release in our since EBITDA our continuing release this

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

Federation a demand to result by and as to an Business see evidence We overall as up equipment XX-year high businesses energy fundamentals. the our our construction of XX%. U.S. at increase continue more from levels capital expenditures and spending National XX%, Index markets than up by a last fueled activity by see their as Independent We In increasing example, XX% plan throughout the confidence manufacturing strong in economic spending of of high business Optimism markets, machinery year. almost related this almost XX%, indicated farm is and

to new second activity is for remained is to In comparison approximately quarter and average optimism at construction the us per in the our continues XXXX, $XXX also our CMC crisis. per the jobs which strength to for U.S. in increased non-residential the to awarded the of growth strong backlog, by bid occurring a Bidding demand ton. the In steel spending ton a financial approximately quarter. X% close fiscal year addition, prior rebar that to than Work provides during grow fabrication second and $XXX for shift contracted in bid in levels is higher in activity third activity U.S. in occurred has being significant contract resulted significant approximately continued the prices. per quarter Strong

investments great represent financial of strong is through by of with quarter, by And is steel the consumption showed co-financed tons. sector support on GDP fourth national – production the of record which in along the our by fiscal quarter a and construction to steel Poland, to XXXX Polish level the This this for operations, the continued helping team results funds. X.X% consumption investment XX.X our increase Polish confidence accounts EU business supported in a Turning EU during operation. projects year metric of in conditions, increased upbeat by rising row profitability third financial to Poland record one for a a XX% years Poland of market to country the for for growth infrastructure The consumption record. XX% the for million of record forecast on pace execution inflow strongest recent rate With XXXX. in

a give like some on strategic you our to brief update investments. recent of I'd Now

First, and from track Durant, we facility. by facility I'm continue production we year are our we consume on at facility in that to to Oklahoma new EBITDA beginning first the terms the in of spool generate micro some own fiscal material positive fabrication are end. to happy to of up mill, this of report ramp internal our

As fabricating introducing a in many the production advantages be America will customers. for hot reminder, CMC with spooled rebar first our North

second We facility South of in are also on located new the non-ferrous at be Durant t-post ready line of A on is that commissioning is end separation site to to begin coming year. Carolina. the downstream our our investment our fiscal shop around track

This prices becomes to along we will more metal return extract investment this As residual the margins attractive increase, on any valuable the non-ferrous enhance as of others waste recycling stream. more even reduce with segment our time. are project and over able

is which of we The for are excited corrosion-resistant about higher an the MMFX, potential investment that rebar. strength, produces third example

We range facilities. have of CMC at now the produced full material grades of various

utilized are over Vice levels shipments product Financial broader With seeing this we discussion Officer. as We I’ll Senior and bring an turn Mary innovative footprint our increased Chief the to also now overview, to to of Lindsey, customers. that President as Mary? our

Mary Lindsey

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

$X.XX exceeded by in results million compares reported quarterly share from third the million year, share, of or quarter XXXX results. prior highest operating from of segments, the strong expenses increasing environment expense XXXX, have $XX.X an Gerdau segment in non-ferrous startup Americas experienced prices with the of million comparison Included prior from pretax half in income by both the the coming $XX.X price results for $X non-ferrous profit diluted to related these from $X.X while segment this million operations quarter from items quarter first the and transaction from the contributed income quarter $X facility mill quarter. in of approximately share, years the per the the last resulting the our year. during expenses at very of this million scrap we eliminates year. diluted and in This production and $X.XX ferrous third profit for we the of the earnings infrequent per of $XX.X the to in for Summarizing have $XX.X operations $XX million million third share very of of this associated to recorded third of earnings, million our Barbara XX%. per seven for of year. ferrous incentives Year-to-date $X.XX quarter. time results, strong, and Oklahoma of continuing prices per earnings or $X.XX As mentioned of were Adjusted effect which earnings which the for operations, third results our the were for continuing Durant, facility, is or for increased the XX% increased our demand acquisition Strong and ferrous from diluted offset costs material continuing or as diluted quarter of Recycling the adjusted

decreased Despite of fiscal XXXX levels Oklahoma same in achieved XX%, Our XXXX. for demand volume operating strong that Americas to the market Barbara to micro of related quarter profit results, in the million to very increasing period mill. prior cost of of to startup the XXXX production the the by same expenses recorded during Included quarter to per third actually inflationary end resulted quarter. the the Mill our adjusted compared for profit comparison period third in approximately due $XX.X by segment the Durant, $XX.X our $X adjusted $X.X ton operating to year. approximately of shipment million conversion pressures, our compared referred when new of period the strong million The of current in

the $X.X decrease quarter lag the in for through by by approaching prices, operating of fiscal increases XXXX. $XX.X third XXXX. third quarter adjusted now cost price of quarter adjusted segment consumed cycle primarily earlier historical the third due This of year compares norm. caused this The in compression operating margin margins Americas selling exiting in loss comparison this million million XXXX. the to raw Fabrication of incurred increases material for operating are the recorded closer to adjusted in levels of was quarter segment an the to rebar increases the profit this of profit to While

due rebar An the pricing, as segment, margin but quarter third continues of International while in as segment primarily our the puts $XX fiscal million rebar of margins million price continue was to $XX.X strong on the to the Mill XXXX margin operating will anticipate XXXX. in adjusted as a continuing in to Polish profit on demand strong this quarter losses well into will this but driven More shift in segment, metal we seen had another stable million closely. increase third pressure We merchant versus segment. operating for steel. prices situation, through import higher market an operating adjusted half profit benefits focus monitor with lower pressure of mill we and Assuming products run mill by strong this the have on adjusted demand rebar margin quarter due decrease which fundamentals approximately the segment, This out to for XXXX. uptick $XX.X improvement construction segment in puts first in profit office we prices recently, backlog our

However, the record offset the Barbara and the shipping strong that resulted profit volumes quarterly margins referenced. in reduced

Turning liquidity. to and our sheet balance

offering During Notes Senior XXXX. we $XXX of X.XX% due an our a third completed quarter, million,

acquisition. the of raising closing As place we low-cost the to draw facility is of we moment took loan a with market term anticipated in facilitate the raise of Gerdau hand of in the to acquisition. closing our advantage an have financing result opportunistic and funds cash of which on the part and the facility, delayed of anticipation Together credit rates,

is purchase of generated we $XXX generated anticipate result $XXX operations, and the liquidation of working cash the notes wind International volumes to M&D a the price from be $XXX Marketing and approximately of third fund performance Distribution of remaining cash achieved of collection require strong business the and capital earnings, prices the million completing As proceeds of will total investments and between will cash due from our the by million from million from of up the the higher and that strong most We segment. Manufacturing was partially the our we million. offset in business, offering, and This debt $XXX to quarter. the during

remains Our healthy. very balance sheet

mill. for the million. XXXX Capital $XXX.X the it As you outlook. under which to Thank in of related new sales totaled now and estimate $XX.X of $XXX turn back million totaled credit quarter million accounts to for of expenditures cash million the equivalents completion XX, and facilities will XXXX. our that and $XXX.X were Barbara be range May over Oklahoma We includes capital of I'll our very million third cash receivable spending availability approximately $XXX to XXXX expenditures for much.

Barbara Smith

Mary. you, Thank

to markets XXXX. We continue our and demand to look by U.S. we customer more key has strong very supported remainder Poland end domestic show of for and in to quarters, be optimism. steel robust continue and specifically few markets confident been the as the fundamentals In the demand our strength past

We in to notably our proceeding with our of certain expected. the the the request With investments, of expect recent from most the rebar is in Durant the shipment the respect continue HSR comply as production within and are the in positioned well move fourth be to leverage will assets ramp the XXXX. approval we the final to we by we weeks which the preparing announced second up end Gerdau production months. and Justice to coming to crew facility continue process continue acquisition review to Department volumes S.A., to coming for The for of closing look We anticipate provided substantially forward of transaction. transaction as regulatory add

effort spent the few we the for closing past of Over considerable in transaction. months, the preparing

secured As and operational financing come order integration for Mary we attractive in we building acquisition, together. the on organizations are plans the the when fund to have mentioned, transition and side,

very how phase moving being are are and We once into the pleased these transaction. we the plans look close developed to forward with execution

the trade subsidized Trump Finally, unfairly threat important and to very taken their effect pleased President imports XXX priced we Section are and of domestic action the reduce with on a measures very steel the by industry. on

basis attractive confident returns thus can a level very are our global field, and with effectively to that playing We fair and on we stakeholders. deliver compete a

were per thinking costs actual pre-clear Turkish and increasing product. for According Also ton. U.S. value Data, an per for as regarding Import in Just the The reflect now to open for be data we’ll tons note Department declared public this CMC. of declared value imports does value into average rebar ton. the U.S. at base Commerce into April update $XXX an The or values the transportation or must price Section XXX,XXX imported May to import considered not rebar the cleared declared for not all example the at should U.S. be time, $XXX and value And imports the in addition U.S. costs are tariff to for license in not the anti-dumping an countervailing addition average XXX your in the XX% declared to to and include existing All prices which market. port of inland above expenses, does fees, XX% from to the tariff rebar. include Thank also profits. when range you shows The insurance questions. the call selling as ocean steel for interest these distributable about added which imported data. And X% does duties, levied XX% freight of that

Operator

Our Ladies ahead Sachs. session. will Korn question. question the Instructions] we now with Please from today [Operator first from Goldman go and your Matthew comes gentlemen, question-and-answer begin

Matthew Korn

the and Barbara Mary. questions. Hello, Thanks taking for

Barbara Smith

morning. Good

Mary Lindsey

Matthew. Good morning,

Matthew Korn

you is construction on you So, the reason Now be is there much as the continuation of of be any domestic how there? volumes America quarter to the strong as the what from run the fourth shouldn't this XXX,XXX expecting the if should you factor segment, of seasonality may third the then similar very you to Mill mentioned quarter? us reach you and And in reason quarter. rate It Durant for a ton see given demand see by sounds little contribution rest be full shipping of though not You year, year-end? explicit more of it? tenor any could you a got and pace strong expect what the kind

Mary Lindsey

Okay. Matthew. There a was there lot

I if your missed So, please one questions, follow-up. of

similar quarter. be quarter in the year. steel third of the the First fourth terms busier expect Typically, U.S., the it to of to the all, in domestic be would part continues of we demand to

months. disruptions, next And we to so good weather absent levels the three any shipping related see for expect would

we commissioning the the and mill first we commissioning and and fourth and April the pace on In Durant the are commissioning EBITDA and those everything so commissioning would is breakeven that was – and will in activities timeframe in track continue, Durant fiscal our we that we the began the I believe facility. from spooler, on expect main terms quarter of the of be contribution commissioning the in part still phase, then facility,

that to crew, for to so that see take of spools straight is I mill, only the be now rebar. beginning train that said by In that it we terms believe market comments, not we the of that fiscal but some they're to hiring be as three-crew going we hire tons the sure up to the our of that of give to noted environment. always crew, are of at fully healthy product ability XXX,XXX would I we look I announced upon news that the that time that our also earlier when tons, expect hire make based XXX,XXX demand, ramping we crew us add situation the in was year. and end capacity we to fourth the it and And we crew of fourth good operating will I to to indicated would of will roughly off the a demand announced the The – to which And think get construction safely rebar, within would capable us mill. we that

when at capacity is full to XXXX this And second of would be would run the say rate. at point that we I fiscal half so in look

Matthew Korn

concise second it clarity. one. you with very I my think Got covered And it. all. I'll appreciate be the I

put flat one how at look? rebar stayed fabrication side, a before On quarters two the would margin towards now later, as forward? would roll sooner in prices move that today through or to if from much the breakeven you contracts translates improvement that how year-end, Would to see you us

Barbara Smith

from bid rapidly mean, we positive Yes, see fiscal that point. hard results improve to business, thanks. – next mentioned, seeing year the is I using jobs durations. the but assumption your backlog, probably all] just the some – as obviously actual through that moves predict escalating in these in to the middle to so cycling to it's [when expect Yes, begin from if to would it different the towards rebar forward, price begins our many time as we're at low stabilized, as we replenish If you of this contribution point prices because have ore positive would different that year. And breakthrough backlog have

Matthew Korn

Got you much. very it. Thank

Barbara Smith

Thank you, Matthew.

Operator

question next Please from Martin from ahead Our with comes Jefferies. your go question. Englert

Martin Englert

Hi. Good morning, there. results on improvement congratulations everyone the on and the quarter-over-quarter earnings

Barbara Smith

Thank you, Martin.

Martin Englert

was activity imports touched there. after the rebar with this market as what bidding for substrates profitability was availability a on and you're within potential space? little can with and far business as towards the of gains to of So the here XXX seeing bit the and on color competitors in implemented breakeven some share some move already of fabrication But fabrication provide return you

Barbara Smith

mills. I way really would that the Yes, say not impacting so rebars. XXX same availability is of But impacting that there's is fab, the

in import there significant And availability. seen flowing have we or prices. my her up products been we've a increases Mary raw to is comments still gaps there As are price any make mentioned significant some that material driver to that rebar as I in and remarks, indicated in indicated

all fabricators shifts think historically arise for might amount to support making have of competing gaps that import adjustments we're any work available rebar. and as are to they in just the So I due

Martin Englert

Okay.

of constraints not due share is kind at So any import seeing market fab to gains this time, that fair? necessarily any

Barbara Smith

significant I there. would No, shift say there's not

Martin Englert

about to incrementally? remarks, what in And at calendar import U.S. you to already talk where pressure become going it's some kind you've import in prices in the and of on to relative incrementally? in look you regional recently and half touched the Do Okay. may trends maybe then, Poland anticipate the now U.S. again of of seen your on think think Or What you we prepared some it's back prices? markets some of Can when do see if this rebar going and Poland. you this you based far global but as retracements year? are and as towards greater the

Barbara Smith

don't enjoyed factor pricing, I and indicated we to Martin demand Poland flows And is strong, that around but product demand – been typically comment other good markets and has specifics it's really Yes, relative in would has how a economic growth. to Poland world. I strong it different there's throughout huge on the region say in a as countries is

bit Poland that alarming from and a we've as imports monitor in we And but and see is so late. operate. market us, carefully those something something that We It's take that naturally time-to-time into appropriate. to of actions attract not it's we can any of market little seen where trends

Martin Englert

regions is Poland, looking And at countries Okay. what the of from that some coming and is where of pressure world? in

Barbara Smith

been recent the XXX Russia, putting EU to measures – because that further U.S. Belarus, implemented the or – may later. process consistent probably is the of in up actions The have which similar it in And here should are safeguard come I of Ukraine, is measures safeguard in add also

So some being products I at aimed unfairly the deter some the to anticipate of begin would measures European that potentially priced those of safeguard markets. that's will

Martin Englert

very helpful. That's Thank very much. you Okay.

Operator

question. Our next your go question comes ahead from Please Stanley. from with Piyush Morgan Sood

Piyush Sood

taking Mary. for and Barbara questions. Thanks Hi, the

one, product exclusion from some First end-users basis. by submitted limited Section get product on to relief have some XXX, request

have and So that could seeing for been the or objections equipment them? curious any you products are exclusions requested if you file to what based or have currently grades you either produce on produce you you if

Barbara Smith

I’ve would think or I there exclusions have submissions be that for seen been any terms that no granted. exclusions, rebar, simply in of Piyush, Yes, basically

is at responses of is that indicated that other exclusion us. this there As they a yes, going to time we on been, but going to I monitoring on of know are there parts in those to produce. you thousands that's there don’t as than see so going going I significant but we have the has point request, have think And submitting are we affect more along, industry products and it's come effect we nothing the

Piyush Sood

EBITDA remember startup costs. me. out one to EBITDA there second but some M&A just be curious for And not expenses effectively to better this EPS quarter, stay core in on consistent called you’re side the the adjusting this Thanks. the just next reflect added reporting it So quarter earnings more? why side in to could And about the EBITDA million I and for were if to is kind them going $XX.X similar a of reporting? format And back last which quarter? second,

Mary Lindsey

just It's for really Thanks that the Yes. started extraordinary we idea many this question. in we’ve projects question. on, got both adjust, of going we've the similarly. will and quarter affected next calling some so good of are a as developing out cost the And so

Piyush Sood

Got it. you. Thank

Mary Lindsey

Thank you, Piyush.

Operator

Please with question. from from Terry comes your ahead go question Bank. Deutsche next Chris Our

Christopher Terry

Thanks Mary. questions. taking my and Barbara Hi, for

Q. First one is just profile in the around CapEx

now You said direction downs stage? for the on Gerdau, then to depend quarter that that it it is color ups too $XXX that million can the you and perhaps? and FYXXXX and of million year. it $XX will about for implies million just this obviously the fourth FYXXXX you expect talk on I guess to Thanks. $XX Any excluding of some early probably the or but $XXX million at

Barbara Smith

Chris. Thanks Yes.

our we of for stages better in anticipating estimate I a full-year process give really planning we're what can and results. our are XXXX the when so beginning of we We think report

or when modeling, is known from for assets, date million our think will full on as year's knowledge. of but improvement we're Durant have think we into perspectives number to would I once projects I things will guidance ownership $XXX But list and year those range and keep acquisition course, just again, $XXX planning we're any additional year. in that that plan able the develop completing have range, factor we Obviously, a we I appropriate. have to we obviously next that beginning we and every haven't thinking – cost of in we spending, just that more it our of is CapEx productivity gain will then landed closing we're but CapEx process, million of Gerdau we evaluate the the of and to fiscal the

Christopher Terry

Okay, for Mary. thanks. Maybe one

rest to the that trading from the say working the million] subsidiaries. still of through cash through is the $XXX inflow come quarter? the number, or think the I ops, the to on Just capital statement million, [$XXX is sale come you Thanks. actually million in next the of Is $XX that flow

Mary Lindsey

The with actually million about point. this in number actually capital those of flowing number we're done here flow working bulk through to the the it's working pretty Yes. it $XX much this quarter, capital M&D the Chris. related monetization through the And liquidation. It's of at assets

Christopher Terry

Okay. Thanks. That's it for me. Thank you.

Barbara Smith

Thank you, Chris.

Operator

from ahead with go Longbow your Our next Research. question. Olin comes from Chris Please question

Christopher Olin

could Prices guess my they if seem however taking that started in basis. market. the forward that limit on the I be upside a other lagging to particular merchant bar marketplace I Question the move call. for go there. have out to on Hey, going was categories wondering long on still of product higher, anything thanks there's just some

Barbara Smith

that suspect normally wouldn't say how that imports just the I the inventory there's that products much I that the upside. that could look like? anything merchant upside. anything are any through that limit It’s Chris, system? there's the but is in flow What category, could limit demand various What through is wouldn't

Christopher Olin

rebar on of a like is is lot where assume related. priced, versus on and looks I still you're it timing Okay, your realization your

on guess is we and how forward you my higher put think spreads rebar, going if out guess prices versus question do quarter? I for merchant number So I then adjust is I current this domestic $XXX that bar business metal about what on for the priced market the

Mary Lindsey

mean you I on price third throughout for a that average lag $XXX of and get announced been some quarter, price if you at before into have the right. is look time increases there there generally have Yes, quarter full the you're June. the the absolutely then And the realization been increases it.

price margin is stabilize, the would current further which into scrap to that So assuming then did translate expect some that month, you improvement. that for they

Christopher Olin

ton per margin question? out of $XXX the Is the

Mary Lindsey

comment on I can't that.

Christopher Olin

Yes, fair enough.

Operator

Our with your from next Aldo Research. from Mazzaferro Please question. go question comes Mazzaferro ahead

Aldo Mazzaferro

Mary. good you? How Barbara and Hi, morning, are

Mary Lindsey

Great.

Barbara Smith

Aldo. morning, Good

Aldo Mazzaferro

I you you on that wondering just inflation where your be on what wanted was was there. in basically advantage the may fixed per the you of offset because $X costs. you I volume which Americas of quantify some class an to have fund dig offset the I’m you basis? effect, inflation little there up said a Mary, Could the ton said comment ton factor should into Mills. a pick about a

Mary Lindsey

Yes, it's not be of of significant effects. like tons idea Probably the $X would rough inflationary a Aldo.

Aldo Mazzaferro

So that's Mary? a comparison sequential

Mary Lindsey

to Yes, compared second sequential quarter. the

Aldo Mazzaferro

electro how are those electro year-ago a – pricing? prices seeing you are And how about these affected specifically, on versus movement or days in any

Mary Lindsey

Yes, contract because significant our of lease and kind most I expected we're an first going we continue year, are. costs. prices on the to the we of really be point spread the saw see conversion in spread understand impact half some on going our cost minor it's what this at to mean the effects negotiated conversion to But

half of a it So first it's as not was impact in the going year. significant such to the be

Aldo Mazzaferro

today the extend? comments a you backlogs How mentioned average big and so orders Right, XXX and quick those the how a the in quotes market for current ahead current getting coming long based had and those fabrication, you now where follow-up, that made your on rebar third the quarter. on are the extend? gain $XXX then pricing just right in long on the that price type example reflect you you’re Are on rebar they about price, do of low

Barbara Smith

Aldo, at let a crack me take this.

the competitive of dynamics there demand dynamics fab to there are we're the side are different situations, business, different of whatever given that in rebar market the and are a regional On contracts. types

so in various fab, scrap. – been are raw escalation the the escalating And markets. we you in been in competitive part the material fab, rebar raw And has significant because there for as has material know, in

escalating rebar We're prices to you always we’re well. consistent searching prices escalating, have competitive. And so fab it's see would that profitable, been as because be

the rebar of context scrap with dynamics various with movements, the And so the basically it’s in within competitive price just the markets. consistent are movements – all consistent and

of with In the duration. various job quoting we're constantly terms backlog,

months, month, and don't some that backlog in our the seen Some from of that in turn mix some in know what has shift that any year, a we've turn taken that a turn three historically. dramatic I

Aldo Mazzaferro

Thank right. Barbara. you, All Great.

Barbara Smith

Thanks Aldo.

Operator

comes question Please Markets. from your ahead Phil Capital KeyBanc with question. from go next Our Gibbs

Philip Gibbs

Hey, good morning.

Barbara Smith

Phil. Hey,

Philip Gibbs

a I know how you question just it quarter. have spoke on sense little Durant. on Durant but earlier, much in the I any contributed volume bit a about

what looking to think kind that's XX,XXX quarter? you I tons we’re had about or last of for guided

Barbara Smith

just of We shy XX,XXX, Yes. were the so…

Philip Gibbs

Okay.

volumes strong very very, in business. the core So then

in strongly in may Any to up a and whether you billet were volumes rebar not been? they Barbara sales merchants. some What color sales quarter? way had both think in in on have the providing or or I semi-finished lift

Barbara Smith

always was in think steady We I but have don't the there a a little of Phil, of significant that billet sales. shift diet amount

volumes consistent. a were If you give and need quarter a up was and but it's we what put think good expected. with your And on correct, precise you to number maybe you're follow Durant number pretty pace the I in in model, can Mary

Philip Gibbs

Okay. that. Appreciate

cash in flowed of In was I'm X.X follow-up, it through terms notice the some is fabrication there of of from that the, in that working capital terms impairment the call is that some in that associated operations? largely with didn't terms concluded. the didn't statement million sounds quarter of Was there or in a flow the out. the division leakage of discontinued just you I last maybe like

Mary Lindsey

impairment CTA amount saw of CTA structural small associated amount the CTA, occurred quarter. the second Yes. small during The that sale of was the of – the the business you that with

Philip Gibbs

Okay. Thanks much. it. so appreciate helpful. I Very

Mary Lindsey

Phil. you, Thank

Operator

go question next Very John your Research. with question. John Tumazos ahead from Please from Our Tumazos Independent comes

John Tumazos

Polish little a so give Silk the made historical even Central in the ample Asia sucking they this appeared there wonderful and excess has it there we Turkey, Russia, though Road a for Turkey conditions and Things to turn Kazakhstan market are steel of competitive background capacity in Ukraine, why on you strong well? sending are doing in, earnings? China. Italy, rebar, here. project XXXX, us with Is it of now the the capacity evolution be mills are the you rebar after up in recent have early that's all to metal seems period capacity, Can great acquired In Germany, lots

Barbara Smith

here ownership I time products. There the Poland for in of wasn't asset, of but I can has to strategic Gap]. over [Audio capability [Audio make very been to is the say in investments following. the years the broader for Thanks what early of deliberate a that strategy range make Gap] a

other of increasing of types competitiveness. series to also in to be I things of are have and improve lower to and about, and Polish has structure of for is dependent energy structure was much in to and more actions consistent very and Polish leadership historically. basis. a series have that and Polish number so have their seasonal on they their rebar, winters, a the finished cost trends team historical the product mill competitive their cost make make like structure a make time said, was cost of done upon And it of because repositioned cost cyclical their our operation. so have wire would of to And country in only the Poland than economy investments if the you taking rebar investments lot give of all you're been So the developing overall global energy weather mix example allow things. They've which credit highly to products rod, they and with difficult lower for back frame deliberate rebar had merchant, they to they their and and activity also Poland production have you -- go would also the there not what those through shifting the I and thinking strategy, that as we a and they is area a a this

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John Tumazos

you. Thank

Operator

Bradford next with Our question. [Operator comes your Please from Instructions] Research. go Charles question Bradford ahead from

Charles Bradford

Good morning.

Barbara Smith

Chuck. morning, Good

Mary Lindsey

morning, Good Chuck.

Charles Bradford

was Washington building Maybe be a discussion much an a year-ago, not of going Is obviously varying in time in months. heard periods, lot sides both there you anything on? I’ve infrastructure to program, recent very helpful which too would all. about

Barbara Smith

Chuck. Yes,

the in American what infrastructure U.S. significant. is very statistics Society improve be level, massive and monetized you know requirement talked would and great we've it's as investment about again and is the the very, the which of it’s Engineers, good a well, to to infrastructure the As over the and which Civil at over

for We products. The there would which and potentially that are has additional steel ago. item wall, over the on As today taking last would up interested successful agenda the in infrastructure welcome infrastructure program. reauthorization forward. I the topic. would bill voted and this was Act you're you being his of have agenda President, And spending they of as some in couple years today an encourage been know FAST spending of that moving bill right, also or administration of know, immigration the this a passing for in not part the above generate that Congress demand

is and businesses in states of the gap absence of I So question that personal certain might states not our comprehensive – in action Washington. will question that's My it's and we not there a the that level view a a a it's if the funding of is – will refurbish infrastructure in void feel possible plan or and come. passed if also in additional believe of Washington when

see And he needs so in some with and still the finish we had more infrastructure present the is about that talked facility And ceremony. issue and a and priority the but cooperation Durant And clearly, Congress. on that was he from top states for done those spending. states mind [Dr. dedication for Navarro] I'll of have this the just in and our April it a comment back President, you'll

Charles Bradford

Thank you.

Barbara Smith

of End Chuck. Q&A Thanks

Operator

Smith, no back time I’ll call this remarks. to And there ladies turn be at to Ms. closing questions. the and appear for gentlemen more you

Barbara Smith

visits in we for joining with forward Thank today's on all us Thank weeks look you. report you in and once And you. many conference the coming our thank our of We earnings. call. when to again you speaking the today fall in investor annual

Operator

attending thank and presentation. We ladies today's now conference has concluded. the do you And gentlemen, for

now lines. may disconnect You your

Commercial Metals (CMC) 21 Jun 182018 Q3 Earnings call transcript