Commercial Metals Company Reports Decline in Net Sales and Net Loss for November 2024

Commercial Metals Company (CMC) reported a significant decline in financial performance for the three months ended November 30, 2024, with net sales of $1.91 billion, down 5% from $2.00 billion in the same period last year. The company incurred a net loss of $175.7 million, compared to net earnings of $176.3 million in the prior year. This downturn was primarily attributed to a $350 million litigation expense related to a jury verdict against the company, which was recorded as a current liability. The loss per share for the quarter was $(1.54), a stark contrast to the earnings per share of $1.49 reported in the previous year.

In terms of operational metrics, CMC's North America Steel Group segment saw a 5% decrease in net sales to $1.52 billion, driven by a 9% reduction in average selling prices per ton for steel products and downstream products. The Europe Steel Group also experienced a decline, with net sales falling to $209.4 million, a 7% decrease year-over-year. The Emerging Businesses Group reported a 4% drop in net sales to $169.4 million, impacted by project delays and a shift in sales mix towards lower-value products.

Strategically, CMC completed the sale of a rebar fabrication facility for $6.9 million in November 2024, which had a minimal impact on selling, general, and administrative expenses. The company continues to invest in its growth initiatives, including the ramp-up of its third micro mill in Mesa, Arizona, which is designed to meet demand in the West Coast and Pacific Northwest markets. Additionally, preparations for a fourth micro mill in West Virginia are underway, with an expected operational start-up in late 2025.

The company’s total assets decreased to $6.77 billion as of November 30, 2024, down from $6.82 billion at the end of August 2024. CMC's cash and cash equivalents remained stable at approximately $856.1 million. The company reported a significant increase in litigation-related expenses, which contributed to a rise in total liabilities to $2.76 billion. Despite these challenges, CMC maintains a positive outlook, expecting that its ongoing initiatives will yield financial benefits in the coming fiscal year. The company anticipates that its current cash balances and cash flows from operations will be sufficient to support its operational and capital expenditure needs over the next twelve months.