CMC Reports Third Quarter Fiscal 2025 Results

Commercial Metals Company announced financial results for its fiscal third quarter ended May 31, 2025.

• Third quarter net earnings of $83.1 million, or $0.73 per diluted share; adjusted earnings of $84.4 million, or $0.74 per diluted share
• Consolidated core EBITDA of $204.1 million in the third quarter; core EBITDA margin of 10.1%
• North American steel product metal margins inflected upward during the third quarter, exiting at a rate above the average for the period
• Emerging Businesses Group profitability improved sequentially and year-over-year with adjusted EBITDA margin increasing to 20.7%
• Europe Steel Group exceeded breakeven on better market fundamentals and solid cost performance; emerging green shoots point to more improvement ahead
• Transform, Advance, Grow (“TAG”) program exceeding targeted EBITDA benefits; executing on initiatives with annual run-rate expected to exceed $100 million

Peter Matt, President and Chief Executive Officer, commented, “We achieved sequential improvement in our financial performance driven by better market conditions across each of our segments, including a meaningful tailwind from the upward inflection of steel product metal margins within the North America Steel Group and solid demand for the proprietary value added products offered by our Emerging Businesses Group. Activity within domestic construction markets remained resilient as shown by our healthy shipment levels, robust bid volumes on new work in the pipeline, and stable downstream backlog. These factors, and our significant exposure to the large and growing U.S. public infrastructure market, give us confidence that CMC should perform well through the balance of our fiscal year.”

Mr. Matt added, “Our TAG program, which represents a key pillar of our strategy, is gaining momentum and delivering solid contributions to CMC’s financial results. Benefits related to TAG have exceeded our targets through the first three quarters of fiscal 2025, and we are increasingly confident regarding the ability of this program to drive sustained improvements to margins, cash flow, and returns on capital. By getting more out of our existing business through TAG and pursuing attractive organic and inorganic growth opportunities, we are positioning CMC to create meaningful value for our shareholders. The impact of our strategic efforts should be further magnified by powerful structural trends within our key end markets related to infrastructure investment, reshoring, artificial intelligence, energy transition and generation growth, and the need to address our nation’s housing shortage.”

Third quarter net earnings were $83.1 million, or $0.73 per diluted share, on net sales of $2.0 billion, compared to prior year period net earnings of $119.4 million, or $1.02 per diluted share, on net sales of $2.1 billion.

During the third quarter of fiscal 2025, the Company recorded estimated net after-tax charges of $1.3 million, primarily relating to interest expense on the judgment amount associated with the previously disclosed Pacific Steel Group litigation. Excluding these charges, third quarter adjusted earnings were $84.4 million, or $0.74 per diluted share, compared to adjusted earnings of $119.6 million, or $1.02 per diluted share, in the prior year period. “Adjusted EBITDA,” “core EBITDA,” “core EBITDA margin,” “adjusted earnings” and “adjusted earnings per diluted share” are non-GAAP financial measures. Details, including a reconciliation of each such non-GAAP financial measure to the most directly comparable measure prepared and presented in accordance with GAAP, can be found in the financial tables that follow.

The Company’s balance sheet and liquidity position remained strong. As of May 31, 2025, cash and cash equivalents totaled $893.0 million, with available liquidity of over $1.7 billion. During the quarter, CMC repurchased 1,113,014 shares of common stock valued at $50.4 million in the aggregate. As of May 31, 2025, $254.9 million remained available under the current share repurchase authorization.

On June 18, 2025, the board of directors declared a quarterly dividend of $0.18 per share of CMC common stock payable to stockholders of record on June 30, 2025. The dividend, to be paid on July 9, 2025, marks the 243^rd consecutive quarterly payment by the Company.

Business Segments – Fiscal Third Quarter 2025 Review

Demand for the products of North America Steel Group was solid during the quarter. Shipments of finished steel products grew by 1.6% relative to the prior year period and increased by 10.4% relative to the second quarter, reflecting normal seasonality. The pipeline of potential future construction projects remained healthy as indicated by CMC’s downstream bidding activity and the Dodge Momentum Index, which measures the value of projects entering the planning phase. Downstream backlog volumes were virtually unchanged on a year-over-year basis and finished the quarter at a level that should support solid downstream shipping levels during the 2025 construction season. Shipments of merchant products (MBQ) grew compared to the third quarter of fiscal 2024 as CMC increased its ability to serve West Coast customers from the Arizona 2 micro mill.

Adjusted EBITDA for the North America Steel Group decreased to $186.0 million in the third quarter of fiscal 2025 from $246.3 million in the prior year period. The earnings reduction was driven by lower margins over scrap costs on steel products and downstream products, partially offset by TAG related benefits. These benefits reflect solid execution across a number of ongoing initiatives, including melt shop and rolling mill yield enhancement, scrap cost optimization, logistics optimization and reduced alloy consumption. Adjusted EBITDA margin for the North America Steel Group was 11.9%, down from 14.7% in the third quarter of fiscal 2024.

Margins on steel products inflected upward during the quarter, increasing by $23 per ton on a sequential basis. Compared to the second quarter, the average selling price for steel products improved by $45 per ton, which outpaced a $22 per ton rise in scrap costs. Within the quarter, CMC successfully maintained price levels achieved earlier in the calendar year despite meaningful reductions in scrap pricing in April and May. As a result of this dynamic, steel product metal margins exited the third quarter above the $499 per ton average for the period.

Emerging Businesses Group (“EBG”) third quarter net sales of $197.5 million increased by 4.7% compared to the prior year period, while adjusted EBITDA for the segment of $40.9 million was up 7.0% year-over-year and 74.0% sequentially. Improved year-over-year segment profitability was driven by strong project-related shipments of Performance Reinforcing Steel, as CMC continues to experience growing demand for its proprietary corrosion-resistant solutions. Adjusted EBITDA declined modestly for Tensar due primarily to delays in certain projects. Financial results remained largely unchanged for Construction Services and CMC Impact Metals, compared to the prior year period. Indications of future market conditions remained encouraging with pipeline measures such as project quotes and new planning activity at healthy levels. Adjusted EBITDA margin of 20.7% improved by 40 basis points compared to the prior year period and was the second highest on record.

Market conditions for the Europe Steel Group continued to improve in the third quarter, supported by solid Polish economic conditions and reduced import flows that helped establish a better balance of supply and demand. Pricing trends improved across each of the segment’s major product categories. The average selling price in the third quarter increased by $51 per ton compared to the second quarter and exited May nearly $70 per ton higher than the December low. Financial results continued to benefit from an extensive cost management program that has meaningfully reduced controllable costs.

Adjusted EBITDA for the Europe Steel Group increased to $3.6 million in the third quarter of fiscal 2025 from a loss of $4.2 million in the prior year period. Excluding the impact of energy cost rebates, third quarter results were the strongest in two years for the segment. The adjusted EBITDA margin for the Europe Steel Group of 1.5% increased from (2.0%) in the third quarter of fiscal 2024.

Outlook

Mr. Matt said, “We expect consolidated financial results in the fourth quarter of fiscal 2025 to improve compared to the third quarter. Finished steel shipments within the North America Steel Group are anticipated to follow normal seasonal trends, while our adjusted EBITDA margin is expected to increase sequentially on higher steel product margins over scrap. Based on project backlogs, we expect financial results for the Emerging Businesses Group will improve on both a sequential and year-over-year basis. Our Europe Steel Group will receive a CO2 credit of approximately $28 million during the fourth quarter as a result of recently signed Polish legislation that divided payments related to calendar 2024 energy cost rebates into two tranches. We expect to receive the second tranche in the first quarter of fiscal 2026. Excluding this credit, adjusted EBITDA for our Europe Steel Group should increase sequentially in the fourth quarter, as we continue to benefit from improved market fundamentals and extensive cost management efforts.”

Mr. Matt concluded, “I am excited by the long-term outlook for our company and the prospect of creating significant value for our shareholders. We have developed – and are executing on – a game-changing strategic plan that is expected to deliver meaningful and sustained enhancements to our margins, cash flow capabilities, and return on capital. We will achieve this by leveraging our TAG operational and commercial excellence program to get more out of our existing enterprise, by completing value-accretive organic growth projects, and by adding complementary early-stage construction solutions that provide attractive new growth platforms. We are confident these efforts will position our company to take full advantage of powerful structural trends in the domestic construction market for years to come.”

For full results click here.

About CMC

CMC is an innovative solutions provider helping build a stronger, safer, and more sustainable world. Through an extensive manufacturing network principally located in the United States and Central Europe, we offer products and technologies to meet the critical reinforcement needs of the global construction sector. CMC’s solutions support construction across a wide variety of applications, including infrastructure, non-residential, residential, industrial, and energy generation and transmission.

Source: Commercial Metals Company