Commercial Metals Co

NYSE:CMC

Earnings Call Transcript 2021-Q3

[Operator]

Hello, and welcome, everyone, to the Third Quarter Fiscal 2021 Earnings Call for Commercial Metals Company. 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 call, the company will make statements that provide information other than historical information and will include expectations regarding economic conditions, effects of legislation, U.S. steel import levels, U.S. construction activity, demand for finished steel products, the company’s future operations, the company’s future results of operations, financial measures and capital spending.

These and other similar statements are considered forward-looking and may involve certain assumptions and speculation and are subject to risks and uncertainties that could cause actual results to differ materially from these expectations. These statements reflect the company’s beliefs based on current conditions that are subject to certain risks and uncertainties, including those that are described in the Risk Factors section of the company’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Although these statements are based on management’s current expectations and beliefs, CMC offers no assurance that these expectations or beliefs will prove to be correct, and actual results may vary materially.

All statements are made only as of this date. Except as required by law, CMC does not assume any obligation to update, amend or clarify these statements in connection with future events, changes in assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise.

Some numbers presented will be non-GAAP financial measures, and reconciliations for such numbers can be found in the company’s earnings or on the company’s website. Unless stated otherwise, all references made to year or quarter-end are references to the company’s fiscal year or fiscal quarter.

And now, for opening remarks and introductions, I would now like to turn the call over to Chairman of the Board, President and Chief Executive Officer of Commercial Metals Company, Ms. Barbara Smith.

[Barbara Smith, Chairman President and CEO]

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

As we reported in the press release issued this morning, it was an outstanding quarter with record consolidated and segment results. And I would like to thank CMC’s 11,500 employees for their continued hard work and focused efforts on behalf of our customers and stakeholders. I’d also like to thank our customers for their continued trust and partnership with CMC during these unusual and rapidly changing market conditions.

I will begin the call with brief remarks regarding our third quarter performance before offering some perspective on the current market environment. I will also provide an update on CMC’s key strategic growth initiatives. Paul Lawrence will then cover our financial results in more detail. And I will conclude the prepared remarks with a discussion of our fourth quarter fiscal 2021 outlook, after which we will open the call to questions.

Before starting my prepared remarks, I would like thank the – I would like to direct listeners to the supplemental slides that accompany this call. The presentation can be found on CMC’s Investor Relations website.

I am pleased to report that CMC’s third quarter fiscal 2021 financial results were the best in our company’s 106 year history. Earnings from continuing operations were $130.4 million or $1.07 per diluted share on net sales of $1.8 billion. Excluding the impacts of a gain on the sale of a small railway reclamation business, adjusted earnings from continuing operations were $127.1 million or $1.04 per diluted share.

CMC reported core EBITDA of $230.5 million generating an annualized return on invested capital of 18%. This level of performance underscores CMC’s enhanced earnings capability, following our multi-year strategic repositioning.

Third quarter volumes were exceptionally strong in North America and Europe and the ability of our commercial, operational, logistics and support teams to respond to the rise in customer demand generated our strong financial performance. Six of our ten mills in the U.S. and Poland set monthly shipment or production records during the quarter, enabling us to capitalize on market conditions.

During the quarter, we also continued to execute on our previously discussed in-flight strategic initiatives and growth projects. We are expanding our capability to service the merchant bar market. Customers appreciate CMC’s expanded product range and service capabilities and we are seeing our recent investments in handling and storage capacity pay-off in increased volumes.

We expect more growth in the future, especially once our state-of-the-art Arizona 2 micro mill starts up in early 2023. We continue to execute on our network optimization efforts and with recent actions firmly impinged in our financial performance, CMC is roughly half way to our longer term goal of $50 million in annual cost efficiencies. You can see the benefit of these efforts in our controllable cost performance on a per ton basis.

Despite well publicized inflationary pressures across the global economy, we were able to reduce this metric modestly on a year-over-year basis. In April, we received the required air permit for Arizona 2, CMC’s planned, state-of-the-art micro mill at our major Arizona site. This was an important milestone enabling us to begin construction and we continue to anticipate an early 2023 start-up.

As a reminder, this plant will be the first micro mill in the world capable of producing merchant bar, as well as rebar. It will also be the first in North America with the capability to connect directly to an onsite renewable energy source. These capabilities combined with a micro mill’s inherent low-cost and low-carbon footprint will define a new level of operational and environmental excellence in long product steel making.

In May, our team in Europe began POD commissioning their plant’s third rolling on. The startup process is going very well and we expect to begin commercial production late in the fourth quarter. This project was delivered on-time and under budget, a testament to our Polish team’s ability to execute. We will be ramping operations within a very strong market environment, which will help shorten the time to achieve our targeted annual runrate incremental EBITDA of $20 million.

I’d now like to provide an update on market conditions. The encouraging trend we discussed during our second quarter call continued and strengthened in the third quarter. As I will detail, project owners have grown more confident as the economy has recovered and states have reopened and they are now more willing to contract new work. This view is supported by the strong level of new awards booked in the quarter.

The strength in new project opportunities is occurring in both the private and public sectors. On the private side, CMC is seeing work related to the hardening of supply chains as well as the trend toward investments in ecommerce infrastructure.

The ongoing global semiconductor shortage, has spurred several very large investments within CMC’s core geographical markets. At the same time, public demand is solid and we are experiencing good activity for highways, bridges and other infrastructure-related applications. Activity in residential markets also continues to be strong.

CMC is growing our participation in this area and our mills have capitalized on the increased demand. The benefit to CMC of new housing investment and community formation is two-fold. The first phase is underway and we are currently benefiting from direct demand from the residential sector. We believe the next phase will include local infrastructure and commercial centers that support new communities.

Historically, the lag between new residential activity and the inflow of supporting non-residential investment has been 9 to 24 months.

Finally, domestic demand for merchant product continues to benefit from the ongoing recovery of industrial production, as well as a lean service center supply chain.

Looking further ahead at our markets, we see several positive long-term developments. Over the last year, the population migration to southern states has accelerated with metro areas in our core Sunbelt geographies being the primary beneficiaries. The continuation of this trend could provide a long-term tailwind to growth of construction in our most important states, compared to the broader U.S. market.

There is discussions regarding a potential long-term infrastructure package are also encouraging. Several proposals are under consideration, any of which would provide a meaningful increase to annual, federal, infrastructure funding relative to current levels.

Based on our analysis, we believe the annual percentage increase to funding ranges from 30% to 60% across the various proposals.

Turning to Europe, demand for CMC’s long products remained robust during the third quarter. Like the U.S., construction activity in Poland is healthy and supporting strong volumes of rebar. The residential market is an important driver of demand in the Polish market and new housing permits and units under construction are growing by double-digits on a year-over-year basis.

Industrial activity continues to recover in Central Europe, driving consumption of CMC’s merchant bar and wire rod products. Germany’s manufacturing PMI in May was amongst the strongest globally, while Poland’s reading reached a new all-time high.

Before I turn it over to Paul, I’d like to briefly touch on the efforts that CMC is undertaking to expand our sustainability disclosures and reporting. We will soon publish our latest corporate sustainability report featuring greatly enhanced disclosures around three key pillars of environmental, social and government.

You will see that as CMC has improved its operational and financial performance, we have also improved our already industry-leading environmental performance. That’s what we mean when we say that good business and good environmental stewardship go hand-in-hand. We will also be setting ambitious environmental goals in line with science-based targets.

I hope that once you read our upcoming report, you’ll have a better understanding of the value we place and steps we take to serve our people, customers, communities, and environment.

Finally, as stated in our press release, the Board of Directors declared a quarterly cash dividend of $0.12 per share of CMC common stock for stockholders of record on June 30, 2021. The dividend will be paid on July 14, 2021. This represents CMC’s 227th consecutive quarterly dividend.

And with that as an overview, I will now turn the discussion over to Paul Lawrence, Vice President and Chief Financial Officer to provide some more comments on the results for the quarter.

[Paul Lawrence, Vice President and Chief Financial Officer]

Thank you, Barbara, and good morning to everyone on the call today. I am pleased to review with you the outstanding third quarter results. As Barbara noted, we reported record earnings from continuing operations of $130.4 million or $1.07 per diluted share, roughly doubled the prior year levels of $64.2 million and $0.53 per diluted share.

Results this quarter include a net after-tax benefit of $3.3 million related to the sale of a small rail reclamation business. Excluding the impact of this, adjusted earnings from continuing operations were $127.1 million, or $1.04 per diluted share.

Core EBITDA from continuing operations was $230.5 million for the third quarter of 2021, up 49% from the year ago period and 35% on a sequential basis.

Slide 7 of the supplemental presentation illustrates the strength of CMC’s quarterly results. Both our North America and Europe segments contributed significantly to year-over-year earnings growth, while core EBITDA per ton finished steel reached a record level of $144 per ton.

The third quarter marked the 9th consecutive quarter in which CMC generated annualized return on invested capital at or above 10%, which is well above our cost of capital. This translates into meaningful value created for our shareholders.

Now I will review the results of our third quarter fiscal 2021. The North America segment recorded adjusted EBITDA of $207.3 million for the quarter, an all-time high compared to adjusted EBITDA of $159.4 million in the same period last year.

The largest drivers of this 30% improvement were: a significant increase in margins on steel products; strong volume growth; and expanded margins on sales of raw materials and continued management of controllable cost also allowed us to fully capitalize on the robust market conditions during the quarter. These factors more than offset the impact of lower margin over scrap on downstream products.

Selling prices for steel products from our mills increased by $170 per ton on a year-over-year basis and $99 per ton sequentially. Since bottoming in August 2020, our average monthly selling price has rebounded roughly $220 per ton. Margin over scrap on steel products increased $40 per ton from a year ago and $74 per ton sequentially.

The average selling price of downstream products of $963 per ton shipped was essentially flat, compared to the prior year third quarter. The flat selling price, coupled with higher underlying scrap cost resulted in lower margins on downstream products.

In a period of elevated ferrous and non-ferrous price of scrap pricing, we realized higher margins on sales of raw materials, which as a result of our vertically integrated network of operations helps provide earnings stability to our consolidated results.

Shipments of finished product in the third quarter increased 9% from a year ago. Both rebar and merchant bar volumes out of our mills reached record levels increasing 8% and 28% respectively compared to the third quarter of fiscal 2020.

As Barbara noted, we experienced good activity in both public and private construction. CMC also continued growing its presence in residential construction, which added meaningfully to the year-over-year increase in rebar shipments. Downstream product shipments were impacted by a reduced backlog and weather challenges in certain geographies resulting in a 4% reduction in year-over-year volume decline.

The recent trend in North American margins, volumes and cost performance can be seen on Slide 8. Our continued focus on operational performance allowed us to achieve record North American financial results. Our team was able to generate a modest reduction in controllable costs per ton of finished steel shipped, compared to a year ago, despite inflationary pressures in freight and certain other costs.

A quick glance at recent Producer Price Index or Manufacturing ISM Reports should underscore the strength of this accomplishment. The most significant benefit came from volume-driven efficiencies at our steel mills and recycling yards, as well as the impact of closing the former Steel California rolling operations.

Turning to Slide 9, our Europe segment generated adjusted EBITDA of $50 million for the third quarter of 2021, compared to adjusted EBITDA of $14.3 million in the same period of the prior year. The improvement was driven by expanded margins over scrap and strong volumes across all ranges of products.

Margins over scrap increased $90 per ton on a year-over-year basis and were up $84 per ton from the prior quarter. Tight market conditions provided the backdrop to achieve the segment’s higher – highest average selling price in nine years reaching $664 per ton during the third quarter. This level represented an increase of $227 per ton, compared to a year ago and $132 per ton sequentially.

Europe volumes increased 8% compared to the prior year and reached their highest third quarter total in a decade. The strength was driven primarily from the market for rebar. Volumes of merchants and other products also grew on a year-over-year basis supported by good demand from industrial customers in Central Europe, as well as some opportunistic billet sales.

As Barbara mentioned, the demand environment during the quarter was robust with indications that conditions should remain favorable in the near-term.

Turning to our balance sheet and liquidity, as of May 31, 2021, cash and cash equivalents totaled $443 million. In addition, we had approximately $639 million of availability under our credit and accounts receivable programs. In March, we upsized our revolving credit facility to $400 million from $350 million and extended the maturity to 2026.

During the quarter, we generated $94 million of cash from operating activities, despite a $79 million increase in working capital. The rise in working capital was driven by the significant increase in both scrap input costs and average selling prices. We expect working capital balances to increase modestly heading into the end of the fiscal year.

Our leverage metrics remain attractive and we have improved significantly over the last two fiscal years. As can be seen on Slide 12, our net debt-to-EBITDA ratio now sits at 1.0 times while our net debt-to-capitalization is just 20%. We believe our robust balance sheet and overall financial strength provides us the flexibility to fund our strategic growth projects, navigate economic uncertainties and pursue opportunistic M&A.

CMC’s effective tax rate for the quarter was 22.6%, which was below our full year effective rate forecast to be around 25%.

Lastly, I would like to provide that our current outlook for capital expenditures in fiscal 2021 remains between $200 million and $225 million, of which roughly $100 million will be used for the new micro mill. For comparison purposes, we have previously stated that our typical capital spend averages around the $150 million annually.

This concludes my remarks and I’ll turn it back to Barbara for the outlook.

[Barbara Smith, Chairman President and CEO]

Thank you, Paul. We expect a strong finish to fiscal 2021. The summer construction season is underway and demand is robust across each of our major product lines in both North America and Europe. We anticipate margins over scrap and steel products in both segments to be consistent or up modestly compared to the third quarter.

Our internal indicators such as bidding activity and backlog level support continued strength. The recent recovery of leading national construction indicators, such as the Architectural Billing Index, Dodge Momentum Index and Portland Cement Association forecast, each mirror our view. These external measures also point to good conditions into calendar year 2022.

Once again, I’d like to thank all of the CMC employees for delivering an outstanding quarter of performance.

Thank you and at this time, we will now open the call to questions.

[Operator]

[Operator Instructions] And our first question will come from Sathish Kasinathan with Deutsche Bank. Please go ahead.

[Sathish Kasinathan, Deutsche Bank]

Yes. Hi. Good morning. Thanks for taking my questions. My first question is on scrap. The reported scrap costs for the North American segment appear to be a bit low than what we had modeled based on what we see on flats of CRU. So, are you seeing any more than normal lag in scrap cost? And when do you think this will normalize?

[Paul Lawrence, Vice President and Chief Financial Officer]

Good morning, Sathish. Appreciate you asking the question. With respect to our scrap inventory, we turn our scrap very quickly. And so, there is not a lot of lag in our scrap expenses in comparison to the indexes. I think the key driver of the difference between what we consume and many of the indexes is really are vertically integrated network of operations and the benefit that we have from two areas.

One is, of our own scrap captive assets and the second is the grade of obsolete scrap that we use to produce rebar in comparison to more of the volatility that is being seen on the prime grades of scrap.

[Sathish Kasinathan, Deutsche Bank]

Okay. Thanks for the color. My second question is on capital allocation. Can you talk about your priorities, particularly the potential for additional investments in Europe, as well as your updated view on buybacks given what we are seeing with some of your peers?

[Barbara Smith, Chairman President and CEO]

Yes. Maybe, I’ll address this and if Paul wants to add any additional color. I think, our view on capital allocation is it remains consistent. We have, as you know and as we’ve indicated a number of very attractively returning investment projects, I mentioned the Danieli 3 line, which is coming online.

We have the investment in AZ 2 that we’ll prioritize some of our capital allocation, but the strong balance sheet that Paul outlined gives us enormous flexibility for organic growth, inorganic growth. We continue to evaluate the dividend and share repurchase.

At this time, on the share repurchase side, while it remains an option. Our organic and inorganic investments are yielding a very attractive return, but, again, we remain open to all forms of capital allocation.

[Sathish Kasinathan, Deutsche Bank]

Okay. Thank you. Congrats on a good quarter.

[Barbara Smith, Chairman President and CEO]

Thank you so much.

[Operator]

And our next question will come from Seth Rosenfeld with Exane. Please go ahead.

[Seth Rosenfeld, Exane BNP Paribas]

Good afternoon. Congrats on a very good quarter and also congrats on authentic sustainability report. We look forward to seeing your new science-based targets. So it’s a very good development. If I can ask two questions please, just with regards to your downstream operations to start out please.

On downstream margins, you noted some compression in your fiscal third quarter. What should we expect for that as we look forward into Q4? I think you noted that for the recent order intake you are achieving good price appreciation, how should we expect that to compared versus scrap input cost into Q4?

And then, a separate question, also for downstream, can you just touch on the backlogs there? I think you commented a stable sequentially in Q3. How would that compare to pre-COVID levels please?

[Barbara Smith, Chairman President and CEO]

Yes. Let me make a remark and then, Paul can be a bit more specific. With regard to downstream margins, we manage the business through the entire value chain. And as you know that we went through the segment change as a result of that.

And so, I think overall, you will see our margins in our North American or European segment remain quite stable on a go forward basis. And that’s the strength of that integrated model. And it is designed to absorb changes in raw material pricing. And so, I think you can see some nice stability through the value chain.

In terms of the backlog, while it is stable, I think that, there are just lots of positive signs relative to a year ago. Bidding activity is good. All of the indicators that we highlighted in our remarks are continuing to improve and gain momentum. The reopening in the U.S. has been stronger candidly in the second half of our fiscal year than we might have anticipated a year ago. The reopening in Europe, as you experienced firsthand, Seth, has lagged the U.S. a bit. But that seems to be gaining momentum and certainly we are seeing those positive signs in our business, so.

[Seth Rosenfeld, Exane BNP Paribas]

Okay. Thank you very much. And I guess, one last question please. Can you talk on the downstream rolling capacity within Poland? You touched on earlier that you’ve already begun the ramp up process there. Can you just remind us please of a timeline that had full capacity and full economic contribution as expected, please?

[Barbara Smith, Chairman President and CEO]

Yes. So, I think, we indicated it’s roughly 200,000 tons of additional capacity taken advantage of excess mill capability that we have. And we are in the early stages of the commissioning, but we have such a strong team in Poland and they execute so well. I am very, very encouraged by the early days of the commissioning, nearly all of the product coming off of the line is saleable product.

So, we anticipate a strong ramp up to that 200,000 and certainly, the market is supporting that the need for that additional capacity. I don’t – at this stage, since we are literally just a few weeks into it, I don’t want to make some specific commitment, because you are talking about a lot of complex equipment and debugging of software and other things that needs to cover over the next couple of months.

But knowing how well the team in Poland executes, I would expect to see a very strong ramp up and be able to get to the targeted levels early into our fiscal 2022.

[Seth Rosenfeld, Exane BNP Paribas]

Okay. Thank you very much.

[Operator]

And our next question will come from Timna Tanners with Bank of America. Please go ahead.

[Timna Tanners, Bank of America]

Yes. Hey. Good morning, everyone.

[Barbara Smith, Chairman President and CEO]

Good morning, Timna.

[Paul Lawrence, Vice President and Chief Financial Officer]

Good morning.

[Timna Tanners, Bank of America]

I wanted to ask about on capital allocation and then hone in a little bit more on Europe. Just on the capital allocation side, I noticed you commented on opportunistic M&A and I just wondered if you can characterize the opportunities if they are more a downstream or upstream or how they are looking relative to the past or any color there just how you are looking at that in light of current very strong conditions, are there a lot of opportunities?

[Barbara Smith, Chairman President and CEO]

Thank you, Timna. This is always a challenging one, because we can’t really talk specifics. But we are open and looking across the value chain, I would say, we would prioritize – prioritize upstream where we have needs to build that additional capability of recycling and collection to support our mills. We are in a great position, but with our broader footprint, there is some areas that might be attractive to us.

We will look across our full geography. Probably, not going to see us build our rebar fabrication to any great extent and mostly we were to expand our mill capability in that area. But there are other possibilities. We now have wire rod as part of our capability. So, there could be some interesting assets both steel making or downstream that could be something worth considering.

But I wouldn’t say that the market is – there are lot of assets that are coming to market. But we stay very close to the situation and we have a balance sheet to stand ready if something interesting comes along.

[Timna Tanners, Bank of America]

Okay. Thanks for that. It’s helpful. And then on the Europe market conditions, if you could, I know, on the 9th Slide of your presentation, that looks like a massive step change in terms of margins for Europe. I just want to understand is that’s a new normal or how you think about that being sustained?

Certainly, it looks like Turkey is offering tons and Europe is talking about some protection. And CIS tons, we are hearing a level a bit. So, just trying to get a flavor for how to think about that market’s margins going forward?

[Barbara Smith, Chairman President and CEO]

Yes. Thank you, Timna. So, as you know, the safeguards in Europe were initially designed somewhere to 232 and they were modified and changed to a quarter basis and then there have modifications and enhancements to that based on issues that arise in the implementation of all those strategies. So, I think, from the existing safeguard measures, I think we are seeing the effective of – the effectiveness of that and effectiveness of some of the modifications that have made – have been made over time.

I think the second thing is if the demand profile is quite strong, which has helped to support the volumes and the margins in Europe. And candidly, the margins needed to heal and recover following some of the challenges that were brought about by the ineffectiveness of the safeguard measures.

As you may have also read, there is news that the EU has recommended that the safeguards be extended. The vote is tomorrow. So we will be watching that vote carefully. But that’s a good indicator that they are recommending that the safeguards extend. So, I think the strong market conditions are having as much more to do with this as the safeguard has been in place for some period of time now.

[Paul Lawrence, Vice President and Chief Financial Officer]

Yes. I would just add that, different from the U.S., Europe was struggling economically going into the pandemic. And obviously, the pandemic has, as Barbara said, had a greater impact on Europe and – than it has on the U.S. And so, really for quite a period of time now, the European margins were at historical low levels.

And part of this is a recovery back to normal and slightly above at this stage. But it’s not that far above the historical through the cycle levels.

[Timna Tanners, Bank of America]

Okay. Thank you, both very much.

[Barbara Smith, Chairman President and CEO]

Thanks, Timna.

[Operator]

[Operator Instructions] Our next question will come from Emily Chieng with Goldman Sachs. Please go ahead.

[Emily Chieng, Goldman Sachs]

Hi. Good morning, Barbara and Paul. Thanks for taking the time here. My first question is just around what you are seeing in Europe around? And then, from your customers around finding and buying low carbon products, particularly as you have a very attractive carbon profile relative to that some of your peers?

[Barbara Smith, Chairman President and CEO]

Well, I think, the results somewhat speaks of themselves. We are very proud of our low carbon business model and we are very proud of our customer service and quality and we’ve been working on a number of projects in Europe to improve all those things. We have a great team that executes well and as Paul indicated, the market conditions are improving and the economies are healing from the pandemic. So, we see a nice demand profile going forward, which is a result of the combination of all of those things.

[Emily Chieng, Goldman Sachs]

That’s helpful. And my second question is just around your production expectations. I know you mentioned production records during the quarter. But for how long can you sort of continue to operate at such high utilization rates. So, is there some level of maintenance we should expect over the next couple of quarters there? Thank you.

[Barbara Smith, Chairman President and CEO]

Yes. Emily, we conduct maintenance on an ongoing basis and our equipment is maintained incredibly well and we – so, we will comment on specifics as we move forward in the various quarters. But in the coming couple of quarters, there is nothing outstanding to highlight.

[Emily Chieng, Goldman Sachs]

That’s really helpful. Thank you.

[Barbara Smith, Chairman President and CEO]

Thank you.

[Operator]

And our next question will come from John Tumazos with John Tumazos Very Independent. Please go ahead.

[John Tumazos, John Tumazos Very Independent Research]

Thank you very much. I have a couple of questions related to pricing to whatever extent you can describe it. What are current spot rebar prices? Why do bar products diverge so much CMA grew hot-rolled futures this morning by $17.20 per ton. And how much would it be reasonable to expect the August quarter realizations to improve from 794 in the U.S. and Europe at 664? Thank you.

[Barbara Smith, Chairman President and CEO]

John, thank you very much for your question. Unfortunately, we don’t make comments about – specific comments around pricing and I think supply and demand tend to work really, really well. And so, unfortunately, I can’t get more specific than that.

[John Tumazos, John Tumazos Very Independent Research]

What is your invoice price for – quoted price for rebar if somebody wanted to buy a 1,000 tons today?

[Barbara Smith, Chairman President and CEO]

They could enquire on our customer service line and reach one of our sales folks. I am sorry. I am not going to comment on specific prices.

[John Tumazos, John Tumazos Very Independent Research]

Thank you.

[Operator]

And there appears to be no further questions at this time. I would like to turn the conference back over to Ms. Smith for any closing remarks.

[Barbara Smith, Chairman President and CEO]

Thank you, Cole. Thank you, everyone, for joining us today on our conference call. And thank you again to the CMC team for an outstanding quarter of performance. We look forward to speaking with many of you during our investor calls in the coming days and weeks. Thank you again.

[Operator]

And this concludes today’s Commercial Metals Company’s conference call. You may now disconnect.