- Earnings call transcript Q4 2022

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Operator

Hello, and welcome everyone to the Fourth Quarter Fiscal 2022 Earnings Call for Commercial Metals Company. Today’s materials, including the press release and supplemental slides that accompany this call can be found on CMC’s Investor Relations website. Today’s call is being recorded. After the company's remarks, we will have a question-and-answer session and we will 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 economic conditions, the effects of legislation, U.S. U.S. levels, import steel future for new products, operations, facilities, of the for demand and financial and spending. capital the expected benefits execution company’s plan, growth of the company’s of finished activity, operations, the measures steel capabilities timeline results construction company’s future and statements differ could that forward-looking cause results to are These from and assumptions these certain uncertainties involve other risks and speculation and similar materially expectations. and are considered may subject to actual current reflect reports conditions filings those sections are are on factors the certain company’s Commission, XX-K and statements described company’s risk with subsequent on risks based These Form and report Exchange to Form and that including beliefs the on latest of Securities the statements subject XX-Q. company’s uncertainties, the that annual quarterly the and including forward-looking in latest

Although, new of beliefs, are or except this statements or correct, and materially. may or CMC management’s change assume update, CMC these to date current in will obligation vary offers future these does and the prove connection or these law. expectations expectations based as of that be made only to results beliefs assurance statements otherwise. clarify on assumptions, occurrence actual are no as any amend statements events, events, circumstances not unanticipated in required information by or with anticipated All

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

Barbara Smith

quarter CMC's everyone, conference Good earnings for call. you and joining thank fourth morning,

hard focused release, of thank customers was And on employees and work it I'd press in reported continued an and like quarter. to behalf XX,XXX efforts roughly their CMC's the As outstanding stakeholders. our for

the to will few You I continued I in call make these our start providing with Lawrence also will CMC. the which quarter's before trust possible. discuss fiscal market customers after detail Paul information questions. on our I their the today's fiscal open partnership quarter, for the financial with in on to an and CMC's with historic our update then will first a environment. thank call current would quarter for and conclude then more highlights outlook will XXXX, fourth we performance cover results results like

annual CMC's to pleased of my best year to financial listeners performance prepared team, XXX remarks, behalf supplemental this Investor like slides The Relations presentation fiscal CMC's our an marked to XX generated the reported into both its as on from At This net and XX.X% full Europe well level, the capital prior percentage EBITDA. highest year. up segment achieved the invested level of I website. in that history. starting On results. performance return strong can Before that earnings as report be North points direct very accompany on found over record CMC year company's would healthy the ever America I'm XXXX translated call. entire the

present Ukraine, ROIC strategy, within of throughout consistency annualized strategic superior to macro changes of force of global as war quarters, our the widespread in several respond pandemic, CMC demonstrate actions During our the events. value generated execute has well well ability challenges each above clearly This XX%. is strength alone and not is period includes a our over unforeseen XX thoughtful results mention change our the strong XXXX of execution, taken years, team's to which XXXX, fiscal the and the model market as to to the to our Overall, of and the we've flexibility impact last operating conditions that a delivering in our labor decisive shareholders. the supply last the indicator a confirmation dislocations,

financial Our CMC's achievements record. extend beyond

During fiscal our advance capital continued plan, XXXX, on sustainability and we strategic to our growth framework allocation deliver our evolve efforts.

the CMC in needs actions way All of team of the war refugees am this taken our fiscal to their of I country. XXXX, proud the Ukrainian Polish of fleeing the by extremely home responded

homes shelter, the across kindness repeating. own CMC of the and war, We These of selfless avoiding their provided speaking and refugees. of related this border but add did energy character facilities crisis of with team security to culture food, helped company. management them before, need volatile at supply CMC's to in and acts disruptions hundreds people in transport and and to and safety. opened people the have discussed Ukrainians company border their volunteered basic up navigating business ongoing while local They I to of environment employees worth refugees our a on the chain this provided our Poland it's comfort opened that the time challenges. the European our they all to will necessities.

expect with CMC's April, a end applications. leader of solutions Tensar's form use CMC, opening strategic our new the ability accelerate front, new growth demonstrate for growth the commercial relationships unique in which Corporation, The construction strong in construction variety the for a strong company. geotechnical solutions innovative provides acquisition path and wide years benefits construction in their trajectory we On a on expect Tensar value Tensar the of to significant and us valuable customers took provide growth we ahead by CMC doors In will geosynthetic and to a that our Tensar of actions several with completed to provide platform significant as leveraging expertise. already to was across we of and meaningful enhances growth solutions. combination

Arizona a one-third flexibility that to to building rate beauty important in produce of mix sources, the site market, in part the spring for mill This capability initiative bar, first strategic on the a we market pioneering energy manufacturing to We our bar improving the is to network to seamlessly construction of capabilities. track construct XXXX on to connecting to mix rebar to Jobs growth next demand. our production this project, approximately directly of and view rebar which infrastructure producing production CMC's (ph) the of up. be after. enhancing major across mill systems a and capable be a Investment additional products start annual well merchant and X major run based focus service commissioning as strengthening micro X's be in ability optimize Another soon the efficiencies. intent on commissioning new Arizona Act, Infrastructure to Arizona Eastern key X customer micro QX Currently, looks the to towards future change located again world this also is both position power ramping two-thirds should which support rebar once strategic is follow But increase our and We the CMC's fourth logistics and intend U.S. while while providing remains will of production up merchant a public mills expect the year. timed activity on step for renewable begin of of An also initially to with merchant basis.

site We final through selection will process. work the

through final to through give project initiatives, the I strategic more three We will remain the these strategic the details work not While its financial the confident and to future just of $XXX once commercial the EBITDA look to of selection cycle synergies in merits. related site process, a scale is sharing by sense committed a site effect you combined To we we forward increase selection and more we expect acquisition. to finalized. than Tensar CMC million, outlined, the including be

enhance on light to of its year's last and both share that increase accretive shareholders framework quarter progress In cash actions to distributions we allocation returns outlined and while cash was evolving making was the good value intent CMC just During goals. to are form continue call, emphasizing distributions, The indicated fourth strategic capital increasing XXX% growth we shareholders. a to the to of certainly in repurchases. dividends earnings

stock approximately shares. of million alone, quarter During common X approximately the to CMC fourth repurchased equal $XXX million

Our financial executing intend against continue to ability with us and our we do program so. to current the strength provides

share week, our the buybacks, This also to utilizing of This approved addition in represents Board to paid a last amount we year. to increase are dividend In CMC's to $X.XX shareholders. XX% cash more increase policy increase July a a July's return quarterly and Directors dividend. to level of XX% CMC's to

has been results, recycling culture. inception XXX to also turn would to the moment purpose as CMC's over our sustainability I a I our single of to environmental to fourth take ago, years stewardship Before location, emphasize efforts. Since our quarter advancement a and central like

launch fiscal steel, in industry CMC's of neutral quality lowest of that carbon our RebarZero gas the combining which among with greenhouse X has continued XXXX offsets. By and X the We and energy already emissions renewable in legacy steel high the line credits carbon Scope products. with long

our at fabrication customers the that customers high site. enhanced remain mill both X, and sustainability company. construction. on on priority the now end, emissions can mills shops disclosures at are meaningful from a a are job X provide the gate CMC's able focused our timely remains X of to zero We that annual sustainability will environmentally ensures providing our report solutions with sustainable to be December. our and we programs leading To and issuing edge and Reporting basis RebarZero net Scope in neutralizes for

share sales of of quarter Turning $XXX.X now performance. fourth earnings generated our to $X.XX net diluted CMC $X.X on net or million billion. per ‘XX

impact adjusted $XXX.X diluted or Excluding per million that earnings the will items of were discuss, $X.XX share. Paul non-operational

million, quarterly With an company's capital EBITDA of second return CMC achieved quarter's year ago. result strong this on generated performance, core our XX% invested history. XX%. of The CMC of in best increase an from a annualized $XXX

would and clearly strategic and substantial doing current for I now we continue CMC's market poised and starting North past are to Our to value to America. so. actions environment shareholders created turn have with like consistent

the aware concerns And closely. that monitoring these reported we in are We conditions the investment are growing press are of (ph). recessionary well being and the community in financial

historical to both order key However, we no that the manage commentary. the XX reference with metrics product reliable than of major exception to our a higher in historically external in looking by supply signs slowdown. strong. geographies, business, months (ph) in constraints. customers Demand These indicators nine was some and The in we at in market see destocking remains that lead rebar have lines carrying indicators norms inventory quarter been indices chain consumption our from our ongoing internal of across in often inventory resulted strong meaningful that our fourth

spending. non-residential indicators in a Index private Billings year, for Let Architectural me The future monitor. been review several over has of territory the we growth signaling key external expansionary in

been year week the level August, readings reading starts of positive in is sources. a in these reached commercial high both internal and particular commercial healthcare residential. by mirrors of industrial, highest the housing September. provided activity strong entering monthly external increased Index, and highlighted non-residential Additionally, the the measure other planning XX Data multifamily as CMC's consistently in view and for by in picture types have strength. developments. hit institutional institutional driven each and Strength The reported years. the growth of just in tracked, Dodge of XX and The own Momentum projects residential published project In components being education, multifamily phase, recreation and were areas last was index. centers, the

the remained activity a public at types during sectors. driven both the fourth in bidding downstream and basket historically project broad quarter, high levels of private Our by

to So the indicators strong view, best future go-forward towards the while demand. point making term construction of we concerns economic don't discount to headlines, up our continue sum near activity certainly

Beyond the are will trends construction believe near term, we domestic underway activity. that structural there bolster

the funding representing federal a an and to is predesign to activity pipeline. flow in the volume a infrastructure rebar time market X.X a in construction impact typical third-party rate X At it demand XXXX. project Act translate structures in CMC roughly we annual as impact is tons future domestic XX% expected highways, approval, data expected is of and projects into FAST in and that bidding large bridges million approximately core this run quarters. phases roughly into such see within activity compared work signed last should Spending federal rebar that view, plan law consuming million begin XX% of for by to awarding to up the consumption. related the ramp for the moving project assuming over increase incremental first five The will full design of through of Supporting projects and bookings indicates is November. be calendar on years this healthy now to bidding replaced. tracks backlog coming package These estimate tons, should frames We increase

trend Another reshoring is structural meaningful critical industries. the of

are massive York, Texas. and geographically in structure. that including necessitates each floor, semiconductor massive the call billion a June, in Arizona (ph) mentioned previously of These billion these earnings equipment. the highest profile will in or consumption multi-phase electric major geopolitical concentrated of building with projects need situated structures announcements, production. would just of pace industries carry materials and distributed chip plants project These there reshoring options, $XX well operate into and participate have chains, for expect as U.S. CMC a projects. to are of reshoring, scale LNG of plants in New are one at the global and planned experiencing critical to and more the and set our reliability the vehicles focus Since addition with projects memory announced these been the in construction We well have to a have $XXX of new political ensuring new and meaning plant construction and phases, a and last we already of activity future. development underway Ohio. in we supply gas and least under discussed. on facilities. as in the plant export examples participate of conditions chip or Upstate exposed that which $X plant supply consumers to years each three cooperative areas stable recent Pandemic work needed wafer silicon flexibility of under but sourcing given wafer well the CMC last Idaho events the vulnerabilities five securing and well multiple include are of Semiconductor rebar in is beyond reminded Eventually, regimes. Each of billion Texas foundations increased are announcements precision the will have on two its rigidity us in facilities extend rebar natural automotive The in to large in three for and all a chain in other planning, particular battery the also

years. our generally experience conditions August, the in merchant downward use destocking end markets be adjustment stable. did in during destocking The was by short-term course two anticipate the can reported bar. to The industry we demand on OEM and are over which looks volume levels. Turning service to Underlying for in quarter. demand strong September's in OEMs a first triggered figures. July and seen be merchant run the expectation conversations centers for with bar center have price purchasing in first to real line with merchant be service That as bar its to Based rates, order volumes appear

a fourth year-over-year quarter. might grow on activity in construction to you during more As basis Overall, market expect, challenging. Europe conditions continued are the

year which to of activity, the interest slowing impact more the quarter signs strong for a mortgage due show residential has of than began been rising to rates. during However,

the outbreak uncertainty of a panic the and newly well Central of surrounding In most in activity result of and that March Ukraine, among in lower crisis, as now destocking in into rod current fourth following quarter. quarter. negatively this of their shipments addition, demand some war during sanction. as trade quarter. bar efforts carry This unwinding the This is in Encouragingly, products. the end Both products improved of volumes volumes energy historically place depends high a took to that levels. the part the merchant this impacted anticipate was as in industrial announced destocking Turnaround fourth likely reflected the Europe has CMC in buying the nicely portion reflected early May we European the success ongoing on activity energy intermediaries our April the and General prices rebounded from the Union's impacted and contracting. for and the first users in wire will for pace

regards on energy impacted modest supplemental loss a sanctions XX% material ago, rebar a to outside basis. gone at a across countries foreign but crisis Poland EU are One position and countries both broader large trade quarter. of entered EU advantageous looking last to trade with rebar on market Europe. Poland. costs. Slide the trade little Whereas third net more benefited to region, have this from significantly and tendency and has Italy, heights the Germany, in in has trade flows Poland's more which the increased relative illustrated are on as the combined quarter EU, over with has countries the a within Union. the rebar. inside into import X view material the from that offset up in Belarusian France energy Russian presentation, and has electricity With with Polish a to to it Imports basis outside the was declined countries average significantly trade reduction note a performance price up our relatively year cost spot position. has has the European XXX% benefited The logistically accessible fourth historical be might flows on was experiencing for historical compared of higher year-over-year As Poland's the energy

I The is From repeated. it unlikely was a never hope extraordinarily third unusual repeated. quarter perspective, humanitarian and be certainly to

X is financial confident years. rate performance in strong competitive reasons when steel results historical past difficulties of more in Such Europe's across adjusted an being even the it Looking consider CMC faced you excellent however, EU are many position. fiscal environment uncertain the a with one industry. impressive we EBITDA the the context, at was reveals XX the broader at becomes average times fourth This of quarter in an a the

release, of Finally, -- declared dividend quarterly October consecutive XXXX. Board dividend on stated to with share with in I turn Directors as represents per a increasing XX, With capital our Paul the of increase to over Vice now XX% The annual stock some a stockholders the This from in November paid for discussion earlier Chief our record XXXX for on of more Financial fiscal and meaningful represents quarterly per shareholders. that Officer results return said be XXXnd overview, $X.XX the an quarter. CMC quarter of will cash CMC's as an share President on press of I paid provide will of our to and XX, common XXXX. Senior Lawrence, amount dividend three comments

Paul Lawrence

Tensar. you, net Thank XXXX we to compared to and levels charge morning good fiscal write impairment everyone of adjustments quarter in accounting purchase to Barbara, and today form in noted, and diluted which of earnings a million costs tax These expenses year charge the taken after of to CMC's small related ups. the includes or majority Results asset reported also on As $XXX.X million were of $XXX.X call America. quarter million, a $X.X prior The $X.XX acquisition respectively. include this the per quarter $X.XX North of fourth of share Barbara net relates acquisition inventory

XX illustrates million adjusted increase presentation or of of Excluding fourth items, the strength quarter share. $X.XX year EBITDA supplemental from million period. was $XXX.X $XXX per of a earnings of diluted prior representing the million CMC's the the quarterly sharp during for results. XXXX, the Slide these generated Core impact $XXX.X the were

alloys, Europe ever for $XXX per shipped. our North for year-over-year this growth, primarily results prices year-over-year Partially American our on prior segment per reduced quarter downstream ton EBITDA of steel of essentially EBITDA finished unit over quarter increased offsetting to costs significant at $XXX.X basis, were by rate finished due controllable earnings basis $XXX and steel on generated Our for ton improved in scrap comparison from significantly freight. ton in steel In adjusted per due increased increased to the per and of second segment steel products quarter, year-over-year steel fiscal costs. a energy segment products equal over reached increases million per a the Reviewing level. EBITDA underlying mills to of Segment on Selling steel Margin on by per ago. third finished scrap fourth were held to driven on per ago. XX% from a adjusted ton the margins CMC's highest $XXX their benefit ton for of increased to pricing basis drove per the steady in a higher $XXX by quarter. North strong costs. from quarter a flat compared and scrap America year our fourth $XXX year coming at metal ton while its the $XX a products ton ton Core margin XXXX,

per a the with quarter ton higher. down should new ton. the to XXXX scrap this per selling were good of of not a a ago from reprice benefit the at all quarter cost by to followed new higher our of End $X,XXX. The mill production fourth as downstream average a the through total and record the continue from of to our backlog quarter. prior fiscal year increased Shipments average were The selling of the finished of $XXX demand measure for continues market the reaching in material compared scrap our year we price third remained modestly downstream of our robust. above However, available our from a trend mill seasonal was price CMC also in product spread into integrated of network. products margin prior products realized This is quarter. pattern $XXX costs as typical selling record produced This reached

chain, now to abated. supply However, the destocking the have merchant as which appears mentioned, were Barbara shipments during quarter by in impacted bar

materials. construction continue due geographies normal labor of slower certain progress to to in Additionally, than be supply sites on and constrained

growth offset situation slower of in construction shipments mentioned. which just the by the We downstream job from winter into than site roughly by the months. dissipate performance to X% more the CMC's the expect our this heading prior backlog, year impact increased driven period,

deck. XX of supplemental to Turning the Slide

the CMC destocking scrap and of compared conditions increase This ton selling position Zloty would to $XXX year segment Central adjusted been quarter grow, energy $XXX the of Europe. Margins to for for quarter. as increased dollar. U.S. the ton. the on supply EBITDA per paid XXXX, in well in basis. result Europe the $XXX significant as reaching believe is of a EBITDA fourth $XX.X year-over-year this has of were crisis. Europe relative result result $XX.X levels current the to per per a mixed. This the prior Polish CMC's adjusted was costs solely Our ton to million entered prior Europe million scrap a hedge while actual of paid were basis, once generated over a $XX per a purchased decreased average outlined by falling ton and volatility in dividends P&L volumes Demand chain market cost The costs margin of have X% we period We in the well again compared offset environment, continued within year energy positioned below previously. on that utilized. higher impact phase of spot for was industrial selling inventory that as benefit production ongoing as price a Barbara construction as weakening of higher Polish the contractionary a had reduction well price cost alloys, the negative of and into energy

condition. market We $XX.X leader the quarter. a adjust cost million low serve Tensar a EBITDA flexibility of with generated are fourth operational during changing to and

EBITDA million of to adjustment million, net yielding effect inventory, purchase to $XX.X $X.X on margin amounted $XX.X accounting million sales XX.X%. EBITDA an related of the Excluding on

CMC's purchase will million was not the provide $XX.X within million any Of in results American segment. be business developments. reported we included CMC's a related North It segments, included noted within purchase acquisition. Tensar As visibility this accounting million time, but should $X.X into was reminder, further intend $XX.X adjustments that performance expect at within to adjustments, excluding while this to and remaining the do EBITDA, be segment, existing accounting the we Europe

sheet. balance the to Moving

and totaled August cash of XXXX, equivalents $XXX.X cash As million. XX,

do In XXXX receivable and total had addition slightly billion. cash current bringing moved million to have are CMC's of well over alternatives sheet. liquidity approximately and accounts as flexibility, our into and on early not sheet, with and $XXX evaluating utilizing of These gross to cash overall healthy leverage. as we commitment credit consistent notes balance provisions currently lower equivalents, call maturities maintaining under that a a strong availability $XXX are $X.X to million we facilities, have CMC's to liquidity any our balance position refinancing our financial notes

activities, from the During generated we driven costs. quarter, $XX the approximately included capital, cash of $XXX.X of working million from principally scrap million operating a release which lower

year, of operations capital. CMC For the generated million working $XXX.X $XXX million in cash from despite investing

does from flow defined sales operations support XXXX fiscal to $XXX overall amounted from Our free the our our that asset vision. not million cash million million in strategic cash $XXX $XXX million, of less figure in That $XXX harvested include to as capital expenditures. does not --

remain metrics last significantly improved have over attractive several leverage Our the and years. fiscal

provide be growth overall sheet tax while effective of rate X.X opportunistic As even tax and to the organic strategic finance in to XX.X%, development M&A the seen credits. at continuing times, our just flexibility projects shareholders. pursue now and our Tensar. net on XX, sits and timing return debt-to-EBITDA driven us strength CMC's balance of to financial quarter cash of research our by recognition was We Slide foreign believe purchase the robust can and ratio the after

our tax XX% Looking between effective with lower approximately to and rate ahead slightly year at expect to full XX%, currently cash be we rate XX%. tax be fiscal our to XXXX,

Turning capital to fiscal XXXX spending CMC's outlook.

which attributable We to expect Arizona a to X. invest $XXX third million can of to in $XXX be roughly total, million

selection site remains As the project micro our Barbara noted, in announced mill fourth phase.

cash this generation As a reminder, projects. the through of we like flow assess cycle viewing the projects

project. selection by we strategic of while longer So this taken the remain encouraged than has very anticipated, the site merits

I'll million an on concludes Transactions $XXX.X remaining initiation turn it roughly program price average at program. million, million $XXX.X have comments fourth so $XX.XX shares since leaving under of buyback purchased fiscal to quarter per share. our the my Lastly, roughly for CMC X the to Barbara outlook. This amounted during remarks, back the of the

Barbara Smith

Thank you, Paul.

fiscal position confidence XXXX entering levels, giving at activity downstream are backlog a and us the outlook in for strong the high near-term in volumes. with bidding We historically

look enhance the quarter. of will financial start-up next We which market. forward our calendar construction mill, to strong in first in anticipate Additionally, another we spring the capitalize strength we see CMC's to the the in on of Arizona newest fiscal greatly micro performance year, ability X,

We expect America, are to Europe continue for good products in conditions demand in uncertain. North more our while

earlier, compete flexibility. cost quarter discussed their I to as Margins North are scrap to and given from the CMC's in leadership However, slightly over positioned position in both remain operations very Europe material likely well and levels Poland compress Once are America price employees order operational year competitive performance. long for of yet and all with changes supply. like increased thank outstanding delivering the again, another and CMC fourth in to quarter I'd steel to of raw

Operator

first And Thank comes we time, our from [Operator question this you. Emily. will question-and-answer from ahead, begin go Our at Instructions] Sachs. session. Please Chieng Emily Goldman

Emily Chieng

how we how backlog around we to and quarters should and shipments trend at and activity is some that next Is many this My sitting higher? first the months you and seeing the destocking starting Barbara perhaps of customer seeing in around triangulating you're expansion question for color comment as here. update you the North to morning, that the American ease Paul. what just of should order markets morning. book provide now be couple is length Good the be Thank you'll construction levels? Could implication

Barbara Smith

[Indiscernible] Emily.

extends XXXX. into well Our backlog

fiscal customers raw terms condition of is we're I to in priced a and so there a lot destocking. with a solid don't XXXX. of raw They in quarter comment materials, downward in excellent made first be material a the want particularly inventory. around really with an sitting And in through to Whenever tend will saddled go bit high see of a you price change, trend confidence

seeing us, So they'll and I the the confidence there is three say behind they certainly, adjust customers last we But another of some number initial over that early Ukraine, supply effort on think us think order what inventory have the to with issues, destocking continue through based and I the temporarily and reason inventory is levels. and that's clearly, while in their rate us. work that, we're behind have issues war disruptions on any chain years, supply pandemic the gives quarter, hand. been chain why the persist And they'll the that were know macro here that to in to adjusting degree, starting shock

the so And kick in. market going to fundamentals are

And so we would quarter. a solid first expect really

around You our the we and -- holidays otherwise, seasonality see strong shipments. approaches in always that rebound have but

Emily Chieng

helpful. freight the follow-up and may, costs. direction But be for Great. could the a energy think would if I I And the around controllable you. three along some the travel Europe, Barbara. I cost and of pressures question, both side U.S. color, appreciate those A of you flagged perhaps talk Thank in equation you alloying of that there. to each components, the just if

Paul Lawrence

costs. gas If of Sure. had summer the challenges U.S., I market the well energy extremely we look, and energy think, we the hot with other combination Emily an natural at a in global as as

operate and was fourth at the see controllable so, today we puts go-forward can overall line energy the consumables cost profile as leading but really the in in energy, see Europe, freight, inflationary source specifically, countries I And in experienced that and given and other minor inflation. structure, at for of slides, relatively its environment Slide we'll much with of cited is is we're in in a in the costs. and think we of being which we components in And U.S. our despite to In story to takes advantageous with X I mentioned if market, of what being somewhat Barbara operate the we environment as think more in quarter we our strictly the alloys costs Europe, in it outlined also of we're XXXX. But look Poland area as where in the certainly, needs. its is increases energy overall the in cost domestic Poland relation much fortunate supplemental energy

hedges comparison really Poland in inflation same seeing, the that at -- combining hedges well position time alloy of a we're energy the have in cost energy, But to a principally are Europe, of the relation least for long with us in energy. strong be it competitively long-term to in to in nature, but competitors the small that which we position are a is place, low relatively it's to portion good so And a of our come. cost lower in

Emily Chieng

Paul. Thanks, Right.

Operator

our Timna Research. And Timna. Wolfe from Tanners is question ahead, next coming from go Please

Timna Tanners

Thanks for detail. all morning. a explore the bit wanted very much Good to Two things I with more you.

a the Europe that both pretty still XXX. U.S., If I hobbled Section markets. the prices. energy you is And of many big impact from countries pressure it in definitely on also in with tariff XX% a Turkey with import talked has pretty more characterize about hobbled know seems you could

that's talked talk So seeing little talk you side in I'm was both question could much what the about about the if is U.S.? you're a bit on more you're seeing Europe, about wondering, if you just a and markets? housing I housing could pressure wondering, but in pervasive in how if Second you little bit

Barbara Smith

market competitors in import want Timna. -- and they're past Yeah. you, you themselves rod been pressure versus good that And number know. imports. here product foreign that 'XX a avail has that we the production of very more available there over at side. were for issues the on year-on-year, But U.S. don't it if Thank year data customers wire of public, and various Yeah. bit made coming there some necessary to to those is a of I overemphasize 'XX, that think you as all look

you you deal basis. as offender is point material so, a from as are around struggles ongoing trade Turkey, which And and a relates sources and illegal primary that products. foreign And this really on still that strong been We you've in to in long you with the out, an environment going the point for out deters time. that dumped industry we're it as our rightly coming on of the know,

time, So accordingly. we we're again, we going trade we But all good to and enjoy think respond monitor environment. still it a the

one time At we seen my long of some time, we're from a incredibly any rate in period been an strong for housing interest folks environment quite of a haven't rising that have rates interesting interest of and period housing a in it's has because terms the In think U.S., track. here. But you to multifamily that still unlike XX%. single-family is a rate, mortgage close formation. the the and seeing was I first myself, need of housing There for where potentially evident to shift external that in data is rate now

to interest in deterrent rebar And actually tend the rates a are and a in to higher multifamily. then multifamily, structural of so single-family, which is increase see an intensity if you

have is think at to our pointed have is still this business, not So not kicking point. that to I that impact that we meaningful infrastructure a even certainly going overall, we out, as because the in really

Timna Tanners

that I expecting could Great. first see sneak European just to if Okay. one about ask you're last seen again? million those quarter, you've credit carbon more, in to the if And several $XX years

Paul Lawrence

of back in week. expect is over but dollars reduced, translation and that final that it's the -- by will to that be to that be That's are, program next place all couple yet the of approved do indications last received to We occur Timna, the EU. amount we've But to expected going is the Zloty to determined next we the similar week. Obviously, years. fully be take the amount are approval

Timna Tanners

Okay. Super. Thanks again.

Barbara Smith

Timna. Thanks,

Operator

from Seth. Paribas. question Seth ahead, is next Our Rosenfeld from go PNB Please coming

Seth Rosenfeld

today. taking for our questions Thanks morning. Good

are of the you Another more pressure remarks, late on destocking quarter. please. degree pressure end, an And additional other looking come in the optimism there, confidence seeing perhaps would of still might quarter. color guess out into stop the in I'll pressure. provide your stand checks channel a of have fourth you that question, to that perhaps with the Europe please, In QX, calendar to destocking on I downward some reversal of destocking the scale Can on commented early but prepared your European that in the market. bit a the amortization

Barbara Smith

Yeah.

lot, a (ph). popping Seth You're

captured So question. Paul everybody everything. not where Europe their We I think if that. just start, re-ask us. But and the the view lot destocking we does and go Clearly, I'll in behind continue own a is sure of has your can upon I'm depends economy

just we we very think relative try to I a emphasize other have strong to and alternatives position that reliable. we're

is is flexibility operational but think us. and Difficulty], [Technical largely cost destocking we Our behind the

Paul Lawrence

between dichotomy a area And there's product Yeah. the think would note that I big long Seth, rolled the I flat just and space.

continuing destock, volumes that's to said. on in market. a back but think we underlying different strength it's -- in flat and steel side bounce as we the there I more which, as significantly long play, The is where certainly you did rolled, know, it's Barbara the see

Seth Rosenfeld

deal macro in Europe. investing your And year, the interest attractiveness love environment. either I'd to spoke Europe, thoughts Earlier Thank you the about perhaps your Europe in current very the please, in in Obviously, has much. team since capacity great expanding or within changed publicly you. a inorganically. on your in organically then. Thank some second condition a hear of question,

Barbara Smith

kinds organic, evaluate just projects evaluating very a of Yeah, of like types to to and Seth. process at would that. things. of use any long-term We're a those growth, have never opportunity for very we inorganic, that And peak you. evaluating look cycle disciplined And Thank every always growth. we of say market take I in we also which on view conditions

talk evaluating in nothing long-term a view. we're have that but current to very, about we always there's with this things so And specific that moment, very

Seth Rosenfeld

you. Thank Okay.

Barbara Smith

Thank you.

Operator

ahead. Capital go Gibbs our KeyBanc please And from question Instructions] coming [Operator Phil Markets. from Phil, next is

Philip Gibbs

morning. Hey. Good

Barbara Smith

Phil Hey,

Paul Lawrence

Good morning, Phil.

Philip Gibbs

First question know this Nice is lag pricing to prices we I pricing. as a several quarter. of continued backlog tends last fabrication just and step-up that on move rebar months to up the the escalated as lot over know.

do quarters actually where many move how So have up to ahead looking here? or continue pricing leveled have we out could we

Paul Lawrence

stuff. on current to good strong fourth the really, made can And that is Yeah, continue start, If look and quarter. new downstream up the in there Phil. in it Barbara see is at our add. the activity as alluded of work. really, result, levels to, And I'll Barbara a what's we backlog we

would in, up the we degradation the in two to pricing levels. backlog over so for no So quarters next significant going -- the the assuming new expect with of catch to current the work continue price pricing or

Philip Gibbs

would out baked be for you it know on going the in due $XXX into That's helpful. Okay. midpoint. million or for that that permitting gave mill Is I diligence color years? whether some Northeast phases there and so the or And be or in the is potential the this new there year, something to at CapEx anything

Barbara Smith

Yeah, it. head. my duration to some there. have top as long number we other will bit Phil. begin -- permitting appreciate, little things. there's But in know and a the can hard little don't There'll And which you go is first step process, be to we -- can do phase -- of a through will off the engineering I but the the the

fiscal following And it bulk of so the come probably in year. would the

Philip Gibbs

my then working question is net And last capital. Okay. just on

current pricing fiscal capital or rebar Assuming stay levels, got current and around around be working plus use levels, and you. let's source minus, that you just a you 'XX? to do net what expect have broader downstream you've a say, scrap or stay in Thank

Paul Lawrence

they Yeah, today, Phil. year. capital from to flat If we for are being are we see where hold where all relatively constant would really relatively we the working We'll things those have the also level things seasonality are going our will working year to view, the full be assume be if we throughout year. consistent. for the capital pretty But -- consistent, give of

Philip Gibbs

you. Thank

Barbara Smith

Thanks, Phil.

Operator

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

Barbara Smith

forward us conference your of We the look speaking joining our calls during and weeks. today's with many in call. on coming you. you rest Have investor to great day. Thank you, you. a days Thank everyone Thank for of

Operator

This today. conference us Commercial call. joining concludes for Company you Thank today's Metals

may disconnect. You now

Commercial Metals (CMC) 13 Oct 222022 Q4 Earnings call transcript