Commercial Metals Company (CMC) on Q2 2021 Results - Earnings Call Transcript

Operator: Hello, and welcome, everyone, to the Second Quarter Fiscal 2021 Earnings Conference 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 conference 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 and capital spending. Barbara Smith: Good morning, everyone. And thank you for joining CMC’s second quarter earnings conference call. As we reported in the press release issued this morning, it was another excellent quarter. And I’d like to thank CMC’s nearly 12,000 employees for their continued hard work and focused efforts on behalf of our customers and our stakeholders. I will begin the call with brief remarks regarding our second 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 the third quarter fiscal 2021 outlook, after which we will open the call to questions. Before covering my prepared remarks, I’d like to direct listeners to the supplemental slide deck of information that accompanies this call. The presentation can be found on CMC’s Investor Relations website. CMC reported fiscal second quarter 2021 earnings from continuing operations of $66.2 million or $0.54 per diluted share on net sales of $1.5 billion. Excluding the impact of certain charges, which Paul will cover in more detail, adjusted earnings from continuing operations were $79.8 million or $0.66 per diluted share. Paul Lawrence: Thank you, Barbara, and good morning to everyone on the call today. I’m pleased to discuss with you our results for the second fiscal quarter of 2021, in which we reported earnings from continuing operations of $66.2 million or $0.54 per diluted share compared to earnings from continuing operations of $63.6 million or $0.53 per diluted share in the second quarter of fiscal 2020. Results in the quarter included net after-tax charges of $13.5 million related to costs for debt extinguishment and decommissioning of CMC Steel California operations, which were partially offset by a gain on the sale of certain facilities. We expect both, the debt extinguishment and closure of Steel California, to provide meaningful cost and cash flow benefits going forward. Our January refinancing will reduce annual pretax debt service costs by roughly $8.5 million, while ceasing rolling activity at Steel California is estimated to provide a go-forward annual EBITDA benefit of at least -- of approximately $10 million, in addition to the similar level of savings already realized as we ended melting operations at the facility last year. Excluding the charges taken in the quarter, adjusted earnings from continuing operations were $79.8 million or $0.66 per diluted share. Our core EBITDA from continuing operations was $171.1 million for the second quarter of 2021, an increase of 18% from a year ago. Slide 5 of the supplemental earnings call package illustrates the stability of our core EBITDA per ton of finished steel shipped over a period of time that included not only a global pandemic but also a steep rise in ferrous scrap costs. CMC has managed core EBITDA per ton of finished steel within a range of plus or minus 10% for 8 consecutive quarters and 9 of the last 10. Barbara Smith: Thank you, Paul. We are entering the summer construction season in a strong position. Our construction backlog in North America remains healthy and should support near-term volume levels, which we expect to be consistent with normal seasonal trends. Stable raw material costs should lead to flat or slightly increasing margins over scrap on steel products. We expect volumes in our Europe segment to remain strong, underpinned by growing activity in both, the construction and industrial sectors. The Polish economy is recovering quickly from the global pandemic, and as of January had the lowest unemployment rate in Europe. Industrial production in that month increased at a rate of 5.6% from a year ago compared to the EU average below 1%. Similar to CMC’s North America segment, margins should also improve from the second quarter, depending on the course of scrap costs. Once again, I’d like to thank all the CMC employees for delivering an outstanding quarter of performance. At this time, we will now open the call to questions. Operator: The first question today comes from Chris Terry with Deutsche Bank. Please go ahead. Chris Terry: Hi, Barbra and Paul. Thanks for taking my questions. I just wanted -- in terms of the backlog for fabrication, you mentioned it’s strong. Are you able to quantify that maybe on a year-on-year basis or a quarter-on-quarter basis, just to get an idea of the trends? And then, you mentioned on mill margins that they’re expected to be better heading into the next quarter. I was just wondering if you could talk about the fabrication margins as well. Thank you. Barbara Smith: Okay. And I think I’ll take the backlog question. Maybe I’ll flip it to Paul to talk about the fab margins. Our backlog is really stable, if you look at it on a year-over-year basis. We’re also very encouraged by the level of projects that are out there. And now, as I indicated in my remarks, coming to the market, and so, I would expect good support in terms of our backlog going forward. Paul Lawrence: As far as the fab margins, we expect relative stability in the selling price on the fab side. And as scrap stabilizes, we also expect then that the margin of the fab business over scrap to be consistent and really follow the trends that occur in the scrap market. Chris Terry: Thank you. And just a follow-up, I just wanted to talk a little bit more about the end markets. Obviously, you’ve said there’s a little bit more clarity on where we’re at versus when you last reported. Can you just give a bit more detail on some of the regions, some of the stronger areas, some of the weaker areas of the market? Just trying to understand what specifically maybe CMC outperformance versus the market, and just some more detail across the picture? Barbara Smith: Yes. Thank you, Chris. We recognize it’s been a little bit difficult to monitor things. I think, really, some areas that are stronger than probably a lot of people expected. The internet economy is fueling so much activity in terms of warehouse and distribution. That was strong going in, and it’s only strengthened throughout the last year. Infrastructure has been steady and consistent. And while there are some states that have different financial situations, I think, the infrastructure questions that were looming a year ago about loss of state revenues, I think, all of those questions have cleared. And there’s obviously been some government support to certain states that are maybe in a worse condition than others. I would remind the listeners that we’ve been on a multiyear strategy to increase our participation on the merchant market. And that generally follows industrial activity. And there’s clearly a recovery in the industrial sector that has been interesting for us in terms of our ability to sell into that market. And I think, residential is one that certainly I didn’t expect as much strength in residential this past 12 months is what we’re actually seeing. It’s not surprising if you follow the information around individuals making decisions to move away from the concentrated metropolitan areas. There has been a multiyear migration of population from certain areas of the country to certain other parts of the country. As I indicated in my remarks, there’s been strong growth in states like Texas and Florida and Arizona. Those trends continue and maybe one would say that they’ve accelerated. So, I think, there’s been probably a lot of focus on two indicators, ABI and construction starts. And really, I don’t think either one of those indicators take into account what we’re seeing on the residential side or the infrastructure side. And so, I’ll pause there. I think those are some of the main drivers. But, we’re quite encouraged by what we see. Operator: The next question comes from David Gagliano with BMO Capital Markets. Please go ahead. David Gagliano: I just have a couple of clarification questions. First of all, did you just -- and on the fab business, I misunderstood. I think, did you say you expect overall fab margins to be flattish quarter-over-quarter in this upcoming quarter? Paul Lawrence: David, what we see is from a backlog perspective on the top line, we see stability in terms of the projects that we will be shipping on over the coming quarters. And then, really, the margin will be determined based on your expectations around what happens to scrap costs. Barbara Smith: I would further add to Paul’s remarks that the balance of our backlog is shorter-dated versus longer-dated than maybe what we would have seen in historical periods. And generally, that shorter-dated backlog, it turns faster and there’s less raw material exposure, which is a good trend for us. David Gagliano: Okay. That’s helpful. Thank you. And then, just switching gears a little bit, the commentary about the positive impact from selling lower cost inventory in a rising steel price environment. Can you just quantify how much of a positive impact that was this quarter, and when do you expect that to reverse? Paul Lawrence: Sure. If we look throughout the value chain of operations, our -- the number of days of metallic inventory that we have throughout the process is more or less between 1 month and 1.5 months of material. And so, as we saw the scrap rise during the quarter, there was probably between $25 and $30 a ton of benefit of selling the lower cost material that we saw during the quarter. I think, as we look forward, as Barbara outlined in her comments, we exited with metal margins higher than the average for the quarter. And therefore, we sort of see those two offsetting each other and that we’ll have higher margins going forward, which will offset the inventory gain from the lower cost, so that there will not be much of a reversal going forward. David Gagliano: Okay. That’s helpful. And then, just the last question. Can you just quantify -- now that Steel California is closed, and you may have mentioned it, but what do you expect for the quarterly cost improvement beginning in the third quarter on a run rate -- just on an ongoing basis? Barbara Smith: Yes. I think, what we’re trying to indicate is, the rolling mill closure should result in $10 million of annualized savings going forward. We previously, of course, shuttered the melt shop, which had another roughly $10 million in addition to all the other network optimization efforts. So, we’re about halfway to our goal of $50 million. Operator: The next question is from Timna Tanners with Bank of America. Please go ahead. Timna Tanners: I wanted to follow-up on the comment about demand implied from the potential infrastructure stimulus. And I could have heard this wrong. But, I heard $1 million to $1.4 million incremental demand. So, I wanted to know if that were annual, because I did some quick math on the size of the rebar market. And if I looked correctly at this, it’s 5 million to 8 million tons of domestic shipments, 1 to 2 million tons of imports. So, that would imply -- no matter how you slice it, a pretty huge impact if it were indeed annual. So, just wondering if you could provide a little bit more color on what that forecast entails and how you come up with it. Thanks. Barbara Smith: Yes. Timna, I think, it really depends on the nature of the ultimate final infrastructure bill and how much of that is allocated toward concrete related activity versus -- I know there’s some internet access to rural areas. So, we’re monitoring it very carefully. But, our best estimate, which was supported by industry analysis on the bills that have been circulating through the House and Senate is that estimate of $1 million to $1.4 million of additional incremental demand. And you’re right. It’s impactful to the market. And as you know, you’ve been covering this space for a while, it’s not a faucet that’s off and then it’s on fully on day one. These projects are at various stages of engineering. And so, the volume will trickle into the market over time. Generally, there’s a 12-month lag before any additional infrastructure bill would start translating into steel orders. But, we also believe there’s been engineering work, and there are projects that have been on the boards that maybe we’ll put on hold during the pandemic for obvious reasons due to the uncertainty of things. So, your estimate, our estimate are plus or minus. We’ll see in the end, what it ultimately turns out to be. But, it could be very meaningful to demand. Timna Tanners: And that’s incremental absolute or annual? Barbara Smith: Annual. Timna Tanners: Okay. Helpful. Thank you. And just looking at other Biden administration initiatives, any entail on the upcoming review that’s expected of Section 232? And on higher tax rates, you are a pretty full taxpayer, so just wondering if you have any other insights onto those developments. Barbara Smith: Yes. I like your language, full taxpayer. I would agree. And we very much appreciated the tax rate that we’ve been enjoying, and that’s allowed us to further invest in the business. Look, I’m not sure we have any better insights than you do, Timna. But, on the tax, I think that certainly, corporate tax rates are in the target and on the radar. And I think, whatever happens, the timing, we’ll deal with it at the time. And it’s not going to be detrimental to our plans going forward. As it relates to 232, we are quite involved through the consortium of companies and through our trade organizations to present the evidence that A, this industry is critical to the future of this country. It does have a strong national security purpose. And it also has a very strong purpose to having a strong economy, which economic security leads to national security. I think that we’re encouraged by the administration’s review and thoughtfulness that they’re putting into this to not just reverse something that the prior administration put in place. I think there is clear recognition that there have been economic benefits. I think there’s clear recognition that there’s massive overcapacity globally. I think, there’s a growing understanding of the ESG gap between the U.S. industry and the world. We are the cleanest steelmakers in the world. We at CMC, as you know, have invested in clean steelmaking technology, have the lowest greenhouse gas impact of any steelmaker in the country due to the nature of our electric arc furnaces and our micro mill technology, low energy consumption, on and on. And so, I’m quite encouraged that the conversation about the overcapacity and the ESG impacts of China in particular that has a lot of this excess capacity and very polluting capacity, but there are other countries. So, our hope is that those conversations, I think that the administration has demonstrated a willingness to engage with business on this topic, and certainly, we’ll be very involved in having our voice be heard. And so, I think, we’ll see hopefully some changes to our existing trade regulations that can reinforce the positive benefits that were brought on by 232. But, I do think that the signs are pretty encouraging that it’s going to remain in place for a while longer. And then, other measures will be put in place to really put the pressure on the world of vendors. Operator: Next question comes from Tristan Gresser with Exane BNB Paribas. Please go ahead. Tristan Gresser: First one, please, North America EBITDA performance in Q2. Can you please confirm what was the contribution of raw material external sales in the quarter, and roughly versus on average versus prior quarters, please? Paul Lawrence: That’s the benefit of the vertically integrated network of operations that we have. You’re right. We did see elevated margins in that business. We don’t quantify what those are. But, certainly, if you look at the full value chain, the raw materials segment had -- or business had expanded margins. And that was one of the propelling reasons for the strong results for the quarter. Tristan Gresser: All right. Thank you. And second question, in Europe, I think, you mentioned imports having eased and being a bit more supportive. How do you see the risk to your business, knowing that safeguard measures will be removed this summer? I believe long imports in Europe have significantly declined over the past two years, notably with Turkey, Russia being blocked by quotas. So, do you see a risk there, scenario where come June imports surge back again? Thank you. Barbara Smith: Yes. Thank you, Tristan. I think similar to the conversation we just had with Timna around 232, Europe fully recognizes the same phenomena that we do, that there has been a buildup of excess capacity in certain countries, very inefficient capacity, capacities that is pollutes, that subsidize, that is produced, not using a living wage. We produce very cleanly. And Europe is -- as you know, the green movement in Europe, arguably is more advanced than here in the United States. And so, initially, when 232 was put in place, Europe followed with a similar structure and tariff structure. They converted that tariff structure to a quota structure. And they’ve been making certain modifications to that quota structure to deal with surges of imports at the beginning of the quarter, which have a massive impact to the supply chain, and a very disruptive impact. And so, the -- where they’ve landed with the current modifications, has had a smoothing effect and has eliminated some of those disruptive periods where you get massive surges of imported product into the EU. And then, that has to work through the supply chain. Much like 232, the existing quota that’s in place is due to expire. But, suffice it to say that the industry and Eurofer, which is the trade organization for the European countries is very active in examining that and encouraging an extension of two to three years of the safeguard and quota measures, again, to put pressure on the offenders in the world that have all this inefficient subsidized dirty excess capacity. So, we are quite involved in following all of those developments. And hopefully, Europe will conclude that these measures have been quite beneficial, and they will extend them. Operator: Next question comes from Phil Gibbs with KeyBanc Capital Markets. Phil Gibbs: Hey, Barbara. Just I have a question on just general rebar use. I mean, a lot of the road building programs have been strong and growing for a number of years. Residential construction, to your point, is solid. Is there kind of a rule or a general way to think about the breakdown of rebar demand between road building, residential and other? Barbara Smith: Well, I don’t know that I have a great rule of thumb. We can probably follow-up with you. But, I would say that in general, infrastructure is pretty heavy on -- or uses higher gauge bar and there is a heavy content. Residential are the lighter gauge rebar, the -- normally goes through distribution, and there’s been really a lack of supply there. So, that’s been quite beneficial to us. It’s also an area that the Gerdau mills participated in to a greater extent than CMC. So, that’s been a nice synergy that resulted from the acquisition. I think industrial is a part of the market that’s picking up the whole movement to readjust the supply chain and not have such a dependency on foreign sourcing of critical supplies. I’m sure you’ve read about the semiconductor phenomenon, but it extends earlier in the pandemic around all of the pharmaceuticals and supplies needed for healthcare. So, I think that industrial is an area that has been a bright spot, and I think it will continue to be a bright spot. There are a number of fairly significant projects underway that haven’t even broken ground that are going to create demand that maybe wasn’t there historically at that same level. And the other area that is really strong right now and has been growing is what I’m calling internet economy, the Amazon phenomenon, the distribution, warehouse business. We were recently in Houston visiting our site, and there’s an Amazon facility that they were describing to us five floors, each floor, 14 acres and concrete design. So, you can imagine, you’ve got those kinds of facilities popping up all over the country, as we have all been isolated at home and ordering everything that we need. And our outlook would suggest that that’s going to continue for some time to come. Phil Gibbs: And then, just a clarification on the fab shipments. I think it was mentioned that the vortex had an impact on fab shipments. I think you said about half year-on-year decline was attributed to the delays there. I think seasonally, you said the mill is picking up, as we normally would expect into the construction season. But, are you seeing -- should we expect that in fab as well? And then, maybe on top of the seasonality, the catch-up from the delayed shipments, what kind of sequential growth should we be looking for in the downstream piece? Thanks. Barbara Smith: Yes. Thanks. I’ll start, and then maybe Paul can give a more specific guidance for your modeling, Phil. But, we obviously were impacted in some of our operations, as we were -- we operate in interruptible supply arrangements and had to shutter operations. But, with the weather and the ice and all of that, the cold temperatures, that does not provide for construction activity to even occur when you have those conditions. So, depending on whether it’s Texas or the Gulf states, you lost anywhere from 5 to 9 days of shipping due to that terrible weather event. And as we like to say, it all gets shipped, the projects all get serviced. But, there is a limitation on placing that steel. So, it’s not like you can accelerate it and place, double the amount in a short time frame to make up for that. There’ll be -- no doubt, everybody will be working as many hours in the day to catch up on those projects, but it’s not one for one. What I can say is the shipping rate to date in March is quite strong. And that’s a good indicator for the start of the busy season. And we would expect fab shipments to be consistent with what we’re seeing in the mills in terms of -- and we expect a nice construction season. Operator: The next question is a follow-up from Chris Terry with Deutsche Bank. Please go ahead. Chris Terry: Thanks, Barbara and Paul. Just a little bit more detail on the demand. You talked a lot about the internet economy. I just wondered if you could talk more specifically about commercial office, medical, education, some of the other areas of non-res construction. Thank you. Barbara Smith: I think, it’s a little early to see any bright line trend. I can say that in my conversations with individuals that are in that office, commercial office situation that in a number of conversations that I’ve had, there’s not a rush for companies to abandon their existing office space. There is still -- as the pandemic has gone on, a lot of companies have realized that there is difficulty in problem-solving and collaboration in the virtual world. We’ve all done an amazing job to get the work done in the virtual world, but we are also human beings that like interaction, and problem-solving is best done in that way. So, I think early on, there were proclamations that companies were going to just move to virtual forever. I think as time has gone on and as we’ve learned and seen the pros and the cons that most companies are expecting to get back to work and maybe there’s more flexibility in the work arrangement, but that it’s not going to be an abandonment. So, I think you got to watch the trends that I talked about the population migration. Generally, the migration is also tied to company decisions around moving locations or setting up new locations in certain geographies that are business friendly. So, probably the most distressed will be the hotel. But again, a lot of citizens are staying domestic rather than traveling internationally because that’s pretty prohibitive right now. And so, I would think that the domestic occupancy and activity, especially as the vaccine rolls out here, it could be a really great season, in my view, for travel within the U.S. and hotels et cetera. Operator: The next question is from Sean Wondrack with Deutsche Bank. Please go ahead. Sean Wondrack: Hi. Good morning and great quarter. So, just looking back at your acquisition of the Gerdau assets. It’s extremely opportunistic in retrospect. And now you’re generating high levels of free cash flow at the company, with EBITDA sort of in the mid 500, 600, somewhere in there. You’re not going to have as many sort of cash uses going forward based on kind of the CapEx levels you laid out. So, I guess, my question is, what would be your plan for sort of capital allocation? Do you think it’s more likely you’ll build cash and continue to seek attractive organic or M&A opportunities, or do you think you’re going to potentially take that levels down lower, or how do you think about that, please? Barbara Smith: Yes. I think, to start the debt levels, I think, we’re pretty comfortable with the debt levels where they are. And so, I don’t know that it makes a lot of sense to look at that, unless there’s just some unforeseen macro event that causes a massive economic collapse or something, which we’re not anticipating. But, so, I think, we’ve worked hard over the years to have a strong balance sheet, which gives us the maximum flexibility. And we will examine all avenues to return value to shareholders. We have a very attractive dividend. It gets examined every quarter by our Board. We have a small position left on our share repurchase program. Today, that doesn’t seem like with where we’re trading, the best use of cash to return value to shareholders. So, we continue to look at really good organic and inorganic growth opportunities. And I think, there’s certainly a number of exciting opportunities for us to consider going forward. Operator: At this time, there appear to be no further questions. Ms. Smith, I’ll now turn the call back over to you. Barbara Smith: Thank you. And thank you, everyone, for joining us on today’s conference call. We look forward to speaking with many of you during our investor calls in the coming days and weeks. And hopefully, we look forward to seeing you in person sometime soon. Take care. Operator: This concludes today’s Commercial Metals Company conference call. You may now disconnect your line.
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Commercial Metals Company (NYSE: CMC) Earnings Report Highlights

  • Commercial Metals Company (NYSE:CMC) reported earnings per share (EPS) of $0.78 (adjusted EPS which excluded the $265 million after-tax litigation expense), missing the estimated $0.83 but generated revenue of approximately $1.91 billion, surpassing the estimated $1.83 billion.
  • The company faced a net loss of $175.7 million due to a $265 million litigation expense, contrasting sharply with the previous year's net earnings of $176.3 million.
  • CMC's consolidated core EBITDA for the quarter was $210.7 million, with a core EBITDA margin of 11.0%, and generated $213 million in cash flow from operating activities.

Commercial Metals Company (NYSE:CMC) is a prominent player in the steel and metal industry, known for its production and recycling of steel and metal products. The company operates in North America and Europe, providing a range of products including rebar, wire rod, and merchant bar. CMC competes with other industry giants like Nucor Corporation and Steel Dynamics.

On January 6, 2025, CMC reported earnings per share (EPS) of $0.78 (adjusted EPS which excluded the $265 million after-tax litigation expense), which fell short of the estimated $0.83. Despite this, the company generated revenue of approximately $1.91 billion, surpassing the estimated $1.83 billion. This performance aligns with the Zacks Consensus Estimate, although it marks a significant decrease from the previous year's EPS of $1.63.

The company's first-quarter fiscal 2025 results revealed a net loss of $175.7 million, or $1.54 per diluted share, primarily due to a $265 million litigation expense. In contrast, the previous year's first quarter saw net earnings of $176.3 million, or $1.49 per diluted share. Despite the loss, CMC achieved adjusted earnings of $88.5 million, or $0.78 per diluted share.

CMC's consolidated core EBITDA for the quarter was $210.7 million, with a core EBITDA margin of 11.0%. Late-season construction activity contributed to growth in North American finished steel shipment volumes, although margins were pressured by declines in average steel and downstream product pricing. The North American downstream backlog volumes remained stable, with a strong pipeline for future projects.

The company generated $213 million in cash flow from operating activities, equaling 101% of its consolidated core EBITDA. CMC returned $71 million to shareholders through dividends and share buybacks. The company continues to focus on its strategic growth plan, including organic growth investments and its "TAG" program, which is expected to yield financial benefits in fiscal 2025.

Commercial Metals Company (NYSE:CMC) Quarterly Earnings Insight

  • Earnings per share (EPS) of $0.83 and projected revenue of $1.87 billion for the first quarter ending in November 2024.
  • Analysts predict a decline in earnings, with a focus on the company's price-to-earnings (P/E) ratio of 11.79 and price-to-sales ratio of 0.72.
  • CMC showcases a strong financial foundation with a debt-to-equity ratio of 0.28 and a current ratio of 3.94.

Commercial Metals Company (NYSE:CMC) is a prominent player in the steel and metal industry, known for its production and recycling of steel and metal products. The company operates in a competitive market, with key competitors including Nucor Corporation and Steel Dynamics. CMC's diverse operations span across the United States and Europe, providing a wide range of products to various industries.

On January 13, 2025, CMC will release its quarterly earnings, with Wall Street estimating an earnings per share (EPS) of $0.83 and projected revenue of $1.87 billion. These figures are crucial as they provide insights into the company's financial health and performance during the first quarter, which ended in November 2024. Analysts are keenly observing these metrics to gauge CMC's market position.

Despite the anticipation, analysts predict a decline in CMC's earnings, suggesting the company may not meet the necessary factors for an earnings beat. This expectation is based on the company's current financial metrics, which include a price-to-earnings (P/E) ratio of 11.79 and a price-to-sales ratio of 0.72. These ratios indicate the valuation investors place on CMC's earnings and sales.

CMC's enterprise value to sales ratio is 0.76, slightly higher when accounting for debt and cash, while the enterprise value to operating cash flow ratio is 6.69. These figures reflect CMC's ability to generate cash from operations relative to its overall valuation. The company's earnings yield stands at 8.48%, offering a return on investment for shareholders.

Financially, CMC maintains a conservative debt-to-equity ratio of 0.28, indicating prudent use of debt in its capital structure. The company also boasts a strong current ratio of 3.94, highlighting its ability to cover short-term liabilities with current assets. These metrics underscore CMC's solid financial foundation as it approaches its earnings release.