Q4 2024 Commercial Metals Co Earnings Call

Hello and welcome everyone.

Unknown Executive: In 2024, earnings call for CMC. Joining me on today's call are Peter Matt, CMC's President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press release and supplemental slides that accompany this call, can be found on CMC's Investor Relations website.

to the fourth quarter in fiscal year 2024 earnings call for CMC.

Speaker Change: Joining me on today's call, our Peter Matt, CMC's President and Chief Executive Officer and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press release and supplemental slides that a company that's called, can be found on CMC's Investor Relations website.

Unknown Executive: Today's call is being recorded. If you require operator assistance, please press star then zero. 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 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, construction activity, demand for finished steel products, the expected capabilities, benefits, and timeline for construction of new facilities, the company's operations, the company's strategic growth plan, the company's future results of operations, financial measures, and capital spending.

Speaker Change: Today's call is being recorded. If you require operator assistance, please press star than zero.

Speaker Change: After the company's remarks, we will have a question and answer session and we'll have a few instructions at that time.

Speaker Change: I would like to remind 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.

Speaker Change: Effects of Legislation.

Speaker Change: U.S. field import levels, construction activity, demand for finished steel products.

Speaker Change: the expected capabilities.

Speaker Change: Benefits.

Speaker Change: and Timeline for Construction of New Facilities.

Speaker Change: The Company's Operations.

Speaker Change: the Company Strategic Growth Plan, the Company's future results of operations, financial measures, and capital spending.

Unknown Executive: These and other similar statements are considered forward-looking and may involve certain assumptions and speculation in our 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, but are subject to certain risks and uncertainties, including those that are described in the risk factors and forward-looking statement sections of the company's latest filings with the U.S. Securities and Exchange Commission, including the company's latest annual report on Form 10-K. 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.

Speaker Change: These and other similar statements are considered forward-looking and may involve certain assumptions and speculation in our subject to risks and uncertainties that could cause actual results to differ materially from these expectations.

Speaker Change: These statements reflect the company's beliefs based on current conditions.

Speaker Change: but are subject to certain risks and uncertainties.

Speaker Change: including those that are described in the risk factors and forward-looking statement sections of the company's latest filings with the U.S. Securities and Exchange Commission.

Speaker Change: including the company's latest Android report on Form 10K.

Speaker Change: Although these statements are based on management's current expectations and beliefs, CMC offers no assurance that these expectations were beliefs will prove to be correct and actual results may vary materially.

Unknown Executive: Our statements are made only as of the state, 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 reconciliation for such numbers can be found in the company's earnings release, supplemental slide presentation, or on the company's website.

Speaker Change: House statements are made only as of the state, except as required by law, CMC does not assume any obligation to update, amend, or clarify these statements.

Speaker Change: In connection with future events, changes in assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise.

Speaker Change: Some numbers presented will be non-gap financial measures and reconciliation for such numbers can be found in the company's earnings release, supplemental slide presentation, or on the company's website.

Unknown Executive: Unless stated otherwise, all references made to year or quarter-end are references to the company's fiscal year or fiscal quarter.

Speaker Change: and less stated otherwise, all references made to year or quarter end are references to the company's fiscal year or fiscal quarter.

Peter Matt: And now, for opening remarks and introductions, I will turn the call over to Peter. Thank you. Good morning, everyone, and welcome to CMC's fourth quarter and fiscal year 2024 earnings conference call. I am joined today by our Senior Vice President and Chief Financial Officer, Paul Lawrence. I will start this morning's discussion with an overview of CMC's fiscal 2024 results and the accomplishments during the year. I will then cover our fourth quarter performance, provide commentary on current market conditions, and share an update on CMC's strategic planning up.

Speaker Change: and now for opening remarks and introductions, I will turn the call over to Peter.

Peter Matt: Thank you, good morning everyone and welcome to CMC's fourth quarter and fiscal year 2024 earnings conference call. I am joined today by our Senior Vice President and Chief Financial Officer, Paul Lawrence.

Peter Matt: I will start this morning's discussion with an overview of CMC's fiscal 2024 results in the accomplishments during the year. I will then cover our fourth quarter performance provide commentary on current market conditions and share an update on CMC's strategic planning efforts.

Peter Matt: Awards. Paul will cover the fourth quarter's financial information in more detail, and I will conclude with our outlook for the first fiscal quarter of 2025 and beyond. We will then open the call to questions. As a reminder, additional information regarding the quarters provided in the supplemental slides that accompany this call, which can be found on CMC's Investor Relations website. Fiscal 2024 was another very solid year for CMC, one that included record employee safety performance, the third best financial results in our company's 109-year history, and meaningful progress across a number of strategic fronts. Of our many accomplishments this year, I am most proud of our continuous improvement in safety.

Peter Matt: Paul will cover the fourth quarter's financial information in more detail and I will conclude with our outlook for the first fiscal quarter of 2025 of beyond. We will then open the call to questions.

Peter Matt: As a reminder, additional information regarding the quarters provided in the supplemental slides that a company that's called, which can be found on CMC's investor relations website.

Peter Matt: This school 2024 was another very solid year for CMC. One that included record employee safety performance, the third best financial results in our company's 19 year history and meaningful progress across a number of strategic fronts.

Peter Matt: Of our many accomplishments this year, I am most proud of our continuous improvement in Sathish. Our success as a company starts with keeping our people safe and ensuring everyone leads their shift in the same condition in which they arrive.

Peter Matt: Our success as a company starts with keeping our people safe and ensuring everyone leads their shift in the same condition in which they arrived. In fiscal 2024, we came closer to that goal than ever before, achieving the lowest incident rate in the history of CMC and driving a meaningful reduction in the absolute number of OSHA recordable events. That level of performance does not happen by luck. It happens through a methodical approach to identifying and addressing areas of risk and through direct engagement with every employee. I would like to call out three areas of success on the safety front in fiscal 2024 that the CMC team should be very proud of.

Peter Matt: In fiscal 2024, we came closer to that goal than ever before, achieving the lowest incident rate in the history of CMC and driving a meaningful reduction in absolute number of OSHA reportable events.

Peter Matt: That level of performance does not happen by luck. It happens through a methodical approach to identifying and addressing areas of risk and through directing engagement with every employee.

Peter Matt: I would like to call out three areas of success on the safety front in fiscal 2024 that the CMTC team should be very proud of. First, we drove a significant reduction in the number of incidents involving hands and fingers. And second, we saw a substantial reduction in incidents involving new hires.

Peter Matt: First, we drove a significant reduction in the number of incidents involving hands and fingers. Second, we saw a substantial reduction in incidents involving new hires. These types of incidents are perennial challenges for any manufacturer. CMC included. We have improved in these areas through focus training, rethinking job protocols, and the deployment of new technologies. Third, we saw a dramatic improvement in overall safety performance that recently acquired facilities within our Emerging Businesses group. They have been eager adopters of CMC's industry-leading safety culture and practices, which has resulted in EBG achieving the lowest incident rate among our three operating segments in 2024.

Peter Matt: These types of incidents are perennial challenges for any manufacturer, CMC included. We have improved in these areas through focus training, rethinking job protocols, and the deployment of new technologies.

Peter Matt: Third, we saw a dramatic improvement in overall safety performance at recently acquired facilities within our emerging businesses group.

Peter Matt: They have been eager adopters of CMCs, industry leading safety culture and practices, which has resulted in EBG achieving the lowest incident rate among our three operating segments in 2024.

Peter Matt: Though we can point to a strong safety trend across the organization, the work is never done, and we will continue pushing toward our ultimate goal of zero incidents. Turning to our financial results, fiscal 2024 was among the best in CMC's history. Core EBG of $1 billion remained well above historical levels, though down from the $1.4 billion achieved in fiscal 2023. Without proper context, it's easy to lose sight of just how impressive fiscal 2024 was. Even after declining from peak levels, core EBG last year remained 40% above any pre-pandemic year. The fiscal 2024 core EBG of 12% was likewise historically strong.

Peter Matt: Though we can point to a strong safety trend across the organization, the work is never done and we will continue pushing toward our ultimate goal of zero incidents.

Peter Matt: Turning to our financial results, fiscal 2024 was among the best in CMC's history. Core EBITDA of $1 billion remained well about historical levels, though down from the 1.4 billion achieved in fiscal 2023.

Peter Matt: Without proper context, it's easy to lose sight of just how impressive fiscal 2024 was.

Peter Matt: Even after declining from peak levels, Cory Bidda last year remained 40% above any pre-pandemic year. The fiscal 2024 Cory Bidda margin of 12% was likewise historically strong.

Peter Matt: These notable financial results clearly demonstrate the impact of the thoughtful and decisive strategic actions we took over the last several years, which have enabled us to significantly grow our company, remake our industry and set us on the path for continued success. Our solid profitability in fiscal 2024 translated into strong cash flow from operating activities of $900 million, which supports CMC's ongoing investment in future growth initiatives, as well as our commitment to providing competitive levels of cash distributions to our shareholders. During the year, we return 261.8 million to our equity investors in the form of sherry purchases and dividends, making an increase of 48% from fiscal 2023.

Peter Matt: These notable financial results clearly demonstrate the impact of the thoughtful and decisive strategic actions we took over the last several years, which have enabled us to significantly grow our company, remake our industry and set us on the path for continued success.

Peter Matt: Our solid profitability in fiscal 2024 translated into strong cash flow from operating activities of $900 million, which supports CMC's ongoing investment in future growth initiatives, as well as our commitment to providing competitive levels of cash distributions to our shareholders.

Peter Matt: During the year, we returned 261.8 million to our equity investors in the form of sharing purchases and dividends, making an increase of 48% from fiscal 2023.

Peter Matt: Bybacks in fiscal 2024 were equal to 3% of the shares outstanding at the beginning of the fiscal year, also representing a meaningful acceleration compared to fiscal 2023. CMC made solid advancement along several strategic fronts in fiscal 2024, including meaningful progress on our mill growth projects. We continue to move towards break even in Arizona to the first micro mill in the world capable of producing both rebar and merchant bar products. As with any breakthrough technology, our team has pushed through the unique challenges that come with bringing a first of its kind technology online, and they ended fiscal 2024 with a string of solid and growing production months.

Peter Matt: 5x in fiscal 2024, we're equal to 3% of the shares outstanding at the beginning of the fiscal year, also representing a meaningful acceleration compared to fiscal 2023.

Peter Matt: The MC made solid advancements along several strategic fronts in fiscal 2024, including meaningful progress on our Mill growth projects. We continue to move towards break even in Arizona too, the first micromill in the world capable of producing both rebar and merchant bar products.

Peter Matt: As with any breakthrough technology, our team has pushed through the unique challenges that come with bringing a first of its kind technology online. And they ended fiscal 2024 with a string of solid and growing production months.

Peter Matt: Based on our learnings over the last year and given where we are positioned today, we expect to achieve operational break even on a monthly basis during the first quarter. We continue to feel good about our progress in increasing operating levels and believe we will exit 2025 at or near target annualized run rate of production of 500,000 tons. Meanwhile, we reach several key construction milestones at our Stio West Virginia site in fiscal 2024. We have completed civil work, installed large portions of supporting infrastructure, and poured foundations for process equipment and buildings. Equipment is now being installed, and we remain on track for the commissioning process to begin in late calendar 2025.

Peter Matt: Based on our learnings over the last year, and given where we are positioned today, we expect to achieve operational break even on a monthly basis during the first quarter.

Peter Matt: We continue to feel good about our progress and increasing operating levels and believe we will exit 2025 at or near target annualized runway of production of 500,000 tons.

Peter Matt: Meanwhile, we reach several key construction milestones at our COF's Virginia site in fiscal 2024. We have completed civil work, installed large portions of supporting infrastructure, and forward foundations for process equipment and buildings.

Peter Matt: of Grittman is now being installed and we remain on track for the commissioning process to begin in late calendar 2025.

Peter Matt: In fiscal 2024, we also made significant progress developing the strategic plan that will deliver CMCs' next days of growth. As you may recall, to support these efforts, we began the year with an organizational realignment that is intended to facilitate execution and elevate transparency. This action included creating two segments capturing our traditional steel vertical value chains: the North American steel and Europe steel groups, and a third standalone operating segment for CMCs' under-penetrated growth businesses. The emerging businesses group. Nearly a year on, the realignment is achieving its aim of supporting value-focused decision-making and resource allocation through enhanced visibility into our key value drivers by line of business.

Peter Matt: In fiscal 2024, we also made significant progress developing the strategic plan that will deliver CMC's next days of growth.

Peter Matt: As you may recall to support these efforts, we began the year with an organizational realignment that is intended to facilitate execution and elevate transparency.

Peter Matt: This action included creating two segments capturing our traditional steel vertical value chains, the North American steel and Europe steel groups, and a third standalone operating segment for CMC's underpanditrated growth businesses.

Peter Matt: the Emerging Businesses Group. Nearly a year on the realignment is achieving its aim of supporting value-focused decision-making and resource allocation through enhanced visibility into our key value drivers by line of business.

Peter Matt: Business. Looking ahead, we have developed an ambitious plan that seeks to enhance our growth trajectory and drive permanent improvement in CMC's margin profile by leveraging both accretive organic projects and inorganic growth in attractive adjacent markets. We are very excited about these strategic efforts, and we expect that we expect will drive significant value for shareholders. Little later on this call, I will provide some high-level insights into our plan to enhance margins across CMC. An operational and commercial excellence program we have named Transform, Advanced, and Grow, or TAG for short. And we look forward to providing a more substantive update on our strategic plan in the quarters ahead.

Peter Matt: Looking ahead.

Peter Matt: We have developed an ambitious plan that seeks to enhance our growth trajectory and drive permanent improvement in CMC's margin profile by leveraging both a creative organic projects and inorganic growth in attractive adjacent markets.

Peter Matt: We are very excited about these strategic efforts and we expect we will drive significant value for shareholders.

Peter Matt: Little later on this call I will provide some high leveling sites into our plan to enhance margins across CMC

Peter Matt: and Operational and Commercial Excellence Program. We have named Transform, Advanced and Grow, or Tag, for short. And we look forward to providing a more substantive update on our strategic plan in the quarters ahead.

Peter Matt: In summary, fiscal 2024 was a year that every member of the CMC team can be proud of. We kept our people safer than ever before. We continued to generate strong financial results, and we rewarded our shareholders with increased cash returns. We also continued to build for the future through organic investments and strategic planning that is expected to lay the foundation for significant long-term value creation. Turning now to the fourth quarter results, we reported in our press release this morning. It was another period of good financial performance. CMC continued to generate Corribita margin and earnings per diluted share well above historic averages.

Peter Matt: In summary, fiscal 2024 was a year that every member of the CMC team can be proud of.

Peter Matt: We kept our people safer than ever before. We continued to generate strong financial results and we rewarded our shareholders with increased cash returns.

Peter Matt: We also continue to build for the future through organic investments and strategic planning that is expected to lay the foundation for significant long-term value creation.

Peter Matt: Turning now to the fourth quarter results, we reported in our press release this morning. It was another period of good financial performance.

Peter Matt: CMC continued to generate Corriba da.

Peter Matt: Cory Betow margin and earnings per diluted share well about historic averages. As we have noted on previous calls, we believe margins and earnings are normalizing at sustainably higher levels compared to before the pandemic.

Peter Matt: As we have noticed on previous calls, we believe margins and earnings are normalizing at sustainably higher levels compared to before the pandemic. CMC reported net earnings for the fourth quarter of 103.9 million dollars, or 90 cents per diluted share, on sales of two billion. We generated consolidated EBITDA for the and a trailing 12-month return on invested capital of 10 percent. While results in our North America steel group were hampered by weaker market sentiment that negatively influenced long steel pricing in margins, overall shipping volumes were resilient on some levels of ongoing construction activity. Our Europe Steel Group continued to trend of near-break even on an adjusted EBITDA basis.

Peter Matt: The MC reported that earnings for the fourth quarter of $103.9 million or 90 cents per diluted share on sales of 2 billion.

Peter Matt: We generated consolidated EBITDA for the quarter of $227.1 million producing a core EBITDA margin of 11.4% and a trailing 12-month return on invested capital of 10%.

Peter Matt: While results in our North America steel group were hampered by weaker market sentiment that negatively influenced long steel pricing in margins, overall shipping volumes were resilient on solid levels of ongoing construction activity.

Peter Matt: Our Europe Steel Group continued a trend of near-break even on a adjusted EBITDA basis.

Peter Matt: Excellent cost management is allowing us to maintain our financial performance at this level despite a challenging margin environment and increased incursions into the Polish market by imports from neighboring countries. CMC's emerging businesses group generated strong results during the quarter, and its adjusted EBITDA margin improved on both a year-over-year and a sequential basis. During now to CMC's markets in North America, demand for our steel products remained healthy during the quarter. When adjusted for available shipping days, CMC's volumes of finished products were essentially unchanged, both on a year-over-year and a sequential quarter basis. Activity levels were generally good across our geographical footprint, with some areas appearing to benefit modestly from a catch-up and shipments in the wake of challenging weather earlier in the year.

Peter Matt: Excellent cost management is allowing us to maintain our financial performance at this level, the spite challenging, challenging margin environment and increased impressions into the Polish market by imports from neighboring countries.

Peter Matt: CMC is emerging businesses group generated strong results during the quarter and it's a just EBITDA margin improved on both a year over year and a sequential basis.

Peter Matt: During now to CMC's markets in North America, demand for our steel products remained healthy during the quarter. When adjusted for available shipping days, CMC's volumes of finished products were essentially unchanged both on a year over year and a sequential quarter basis.

Peter Matt: Activity levels were generally good across our geographical footprint. With some areas appearing to benefit modestly from a catch-up in shipments in the wake of challenging weather earlier in the year.

Peter Matt: Stable Shipman volumes have been supported by solid backlogs of ongoing construction projects that continue to consume steel.

Peter Matt: However, given elevated uncertainty regarding the path and the pace of interest rate reductions as well as the outcome of the U.S. presidential election, project owners and key decision makers are hesitant to act.

Peter Matt: As well as the outcome of the U.S. presidential election, project owners and key decision makers are hesitant to act. This hesitancy is widespread across most segments of the construction markets, with the notable exception of publicly funded work such as infrastructure and institutions. Uncertainty has also weighed on steel pricing and margins as the overall market sentiment and near-term confidence have softened. Following six months of impressive stability, we saw metal margins shift lower in mid-quarter, which was the primary driver of reduced consolidated profitability in the fourth quarter compared to the third quarter of fiscal 2024. We believe these market conditions are transient in nature and will subside once greater clarity emerges, allowing strong underlying fundamentals to return.

Peter Matt: This hesitancy is widespread across most segments of the construction markets with the notable exception of publicly funded work such as infrastructure and institutions.

Peter Matt: Uncertainty has also weighed on steel pricing in margins as the overall market sentiment and near-term confidence have softened.

Peter Matt: Following six months of impressive stability, we saw metal margins shift lower during mid-quarter, which was the primary driver of reduced consolidated profitability in the fourth quarter compared to the third quarter of fiscal 2024.

Peter Matt: We believe these market conditions are transient in nature and will subside once greater clarity emerges, allowing strong underlying fundamentals to return.

Peter Matt: CMC's downstream bidding activity has remained resilient, which points to a solid pipeline of potential future projects. Our internal data is supported by external data points, such as the Dodge Momentum Index and insights from customer conversations. The Dodge Momentum Index, or DMI, measures the monthly value of construction projects entering the planning phase. Having recently hit an all-time high, the index appears to indicate that project owners have confidence that a rebound in construction activity will occur in our building a sizable pipeline in preparation to act once construction conditions improve. As mentioned previously, we anticipate a catalyst of improvement will be a clear path toward lower interest rates and visibility into future government policy.

Peter Matt: CMC's downstream bidding activity has remained resilient, which points to a solid pipeline of potential future projects. Our internal data is supported by external data points, such as the Dodge Momentum Index and insights from customer conversations.

Peter Matt: The Dodge Momentum Index or DMI measures the monthly value of construction projects entering the planning phase.

Peter Matt: Having recently hit an all-time high, the index appears to indicate that project owners have confidence that a rebounding construction activity will occur in our building a sizable pipeline in preparation to act once construction conditions improve.

Peter Matt: As mentioned previously, we anticipate a catalyst of improvement will be a clear path toward lower interest rates and visibility into future government policy.

Peter Matt: As we have discussed at length in the past, powerful structural trends will also benefit the U.S. construction market, including infrastructure investment, reshoring of manufacturing, energy transition, and transmission build-out, as well as measures to address chronic housing shortages. We believe these trends are in their early stages and will propel construction activity for years to come. Conditions for our Europe Steel Group were similar to the prior quarter. Benefits from an improving Polish macroeconomic environment and supply discipline among domestic, long-steel producers have been offset by the influx of excess material from neighboring countries, namely Germany. Total imports of REBA are up 85% on a calendar year-to-date basis, while flows from Germany have increased by 141%.

Peter Matt: As we have discussed at length in the past, powerful structural trends will also benefit the U.S. construction market, including infrastructure investment.

Peter Matt: Re-suring a manufacturing, energy transition and transmission build-out, as well as measures to address chronic housing shortages. We believe these trends are in their early stages and will propel construction activity for years to come.

Peter Matt: Conditions for our Europe Steel Group were similar to the prior quarter. Benefits from an improving Polish Macrock and Almic Environment and supply discipline Among domestic long steel producers have been offset by the influx of excess material from neighboring countries, namely Germany.

Peter Matt: Total imports of Rebar up 85% on a calendar year-to-date basis.

Peter Matt: This foreign supply has more than matched the incremental demand from a growing residential construction market and supply reduction from domestic players. As a result, margins remain under pressure. Against this challenging backdrop, our team in Poland has been able to achieve near break-even results through aggressive cost management. The impact of these cost management measures has been significant. As evidenced by the $26.5 million year-over-year improvement in adjusted EBITDA during the fourth quarter, despite an 18% reduction in volumes and no help from metal margin.

Peter Matt: While flows from Germany have increased by 141%. This foreign supply has more than matched the incremental demand from a growing residential construction market and supply reduction from domestic players.

Peter Matt: As a result, margins remain under pressure. Against this challenging backdrop, our team in Poland has been able to achieve near break even results through aggressive cost management.

Peter Matt: The impact of these cosmanagement measures has been significant as evidenced by the $26.5 million year-over-year improvement in adjusted EBITDA during the fourth quarter despite an 18% reduction in volumes and no help from metal margin.

Peter Matt: Based on our current view of the landscape, we would not anticipate meaningful positive change in either the overall market environment or CMC's Europe Steel Group earnings until an economic recovery develops in Germany.

Peter Matt: Based on our current view of the landscape, we would not anticipate meaningful positive change in either the overall market environment or CMC's Europe's steel group earnings until an economic recovery develops in Germany.

Peter Matt: Before I turn things over to Paul, I would like to discuss the strategic path that CMC is embarking on, which is intended to drive the next phase of meaningful, value-accretive growth. As outlined on slide 10 of the supplemental presentation, our aim with this strategy is threefold. First, to achieve sustainably higher, less volatile through-the-cycle margins that are fortified by our operational and commercial excellence initiatives. Second, to execute on attractive growth, organic growth opportunities. Third, in a disciplined manner to pursue inorganic growth opportunities that broaden CMC's commercial portfolio of early-stage construction products, improve our customer value proposition, and meaningfully extend our growth runway.

Peter Matt: Before I turn things over to Paul, I would like to discuss the strategic path that CMC is embarking on which is intended to drive the next phase of meaningful value a creative growth. As outlined on slide 10.

Peter Matt: of the Supplemental Presentation, our aim with this strategy is threefold. First, to achieve sustainably higher, less volatile, through the cycle margins that are fortified by our operational and commercial excellence initiatives.

Peter Matt: Thakin.

Peter Matt: to execute on attractive growth, organic growth opportunities.

Peter Matt: and third in a discipline manner to pursue inorganic growth opportunities that broadened CMC's commercial portfolio of early stage construction products improve our customer value proposition and meaningfully extend our growth runway.

Peter Matt: CMC's goal of permanent and meaningful improvement in its margin profile is being pursued through Transform, Advance, and Grow or TAG, our enterprise-wide operational and commercial excellence initiative. This program is unlike any other ever-launched at CMC due to the breadth and depth of its reach, as well as its visibility and the accountability structures built to support it. Every line of business and every support function has been involved in identifying and quantifying opportunities that now include over 150 different initiatives. This has meant finding value within a business, between businesses and central support, or even across the entire enterprise.

Peter Matt: The MC's goal of permanent and meaningful improvement in margin profile is being pursued through transform, advance and grow or tag. Our enterprise-wide operational and commercial excellence initiative.

Peter Matt: This program is unlike any other ever-launched at CMC due to the breadth and the depth of its reach as well as its visibility and the accountability structures built to support it.

Peter Matt: Every line of business and every support function has been involved in identifying and quantifying opportunities that now include over 150 different initiatives.

Peter Matt: This has meant finding value within a business between businesses, between businesses in central support, or even across the entire enterprise. The involvement in the TAG program has reached deep into our organization as well.

Peter Matt: The involvement in the tag program has reached deep into our organization as well. Those best equipped to identify the greatest opportunities are the team members who work where the action happens on a daily basis. CMC's department, plant, and regional managers. Their participation has been critical as research for value-generating opportunities, and just as importantly, it has created buy-in at a local business level. To drive the execution of CMC's tag program, we have formed a dedicated team to manage the identification, tracking, and reporting of all opportunities. and Indies. This group will also help prioritize across identified initiatives and stage their rollout in waves, in partnership with the initiative owners at the businesses or support level.

Peter Matt: Those best equipped to identify the greatest opportunities are the team members who work where the action happens on a daily basis. CMC's Department Plant and Regional Manager, Managers.

Peter Matt: Their participation has been critical as we search for value-generating opportunities. And just as importantly, it has created by in at a local business level.

Peter Matt: To drive the execution of CMC's tag program, we have formed a dedicated team to manage the identification, tracking and reporting of all opportunities.

Peter Matt: This group will also help prioritize across identified initiatives and stage their rollout in waves in partnership with the initiative owners at the businesses or support level.

Peter Matt: TAG is driving a more elevated level of rigor and visibility to strategic execution that is intended to ensure the success and maximize the amount of value generated. From an investor perspective, we anticipate that value will come as sustained margin enhancement, earnings growth, reduced working capital needs, and greater invested capital efficiency. However, just as beneficial as meeting TAG's financial goals is the creation of a value generating engine at CMC in the form of habits that will be coming grained in our culture as we execute on the program. A drive for continuous improvement, increased collaboration to achieve the targets, and a methodical approach to tracking are all traits that we believe will continue to pay dividends long after TAG runs its course.

Peter Matt: Tag is driving a more elevated level of rigor and visibility to strategic execution. That is intended to ensure the success and maximize the amount of value generated.

Peter Matt: From an investor perspective, we anticipate that value will come as sustained margin enhancement, earnings growth, reduced working capital needs, and greater industrial capital efficiency.

Peter Matt: However, just as beneficial as meeting tax financial goals is the creation of a value generating engine at CMC in the form of habits that will be coming green in our culture as we execute on the program.

Peter Matt: A drive for continuous improvement, increased collaboration to achieve the targets and a methodical approach to tracking are all traits that we believe will continue to pay dividends long after tag runs its course.

Peter Matt: Looking more near term, we expect TAG efforts to start yielding meaningful financial benefits in fiscal 2025. We plan to begin quantifying those benefits for you as we achieve results against the first wave of active initiatives now underway.

Peter Matt: Looking more near-term, we expect tag efforts to start yielding meaningful financial benefits in fiscal 2025. We plan to begin quantifying those benefits for you as we achieve results against the first wave of active initiatives now underway.

Peter Matt: We will have more to share with you in the future regarding our plan to propel growth through both organic and inorganic avenues. But for now, I would like to share a few comments. Organic growth extends beyond our major steel investments. CMC is pursuing a number of smaller projects aimed at bolstering our portfolio for proprietary solutions and enabling us to drive further penetration into growing markets. One such investment is an additional geo-red production line in our Blackwell, Oklahoma facility. The new line will allow CMC to better supply the growing demand for our latest higher margin geo-grade offering, as well as reduced logistics costs to several key North American geographies.

Peter Matt: We will have more to share with you in the future regarding our plan to propel growth through both organic and inorganic avenues. But for now, I would like to share a few comments.

Peter Matt: Organic growth extends beyond our major steel investments. CMC is pursuing a number of smaller projects aimed at bolstering our portfolio for of proprietary solutions and enabling us to drive further penetration into growing markets.

Peter Matt: One such investment is an additional geo-read production line in our Blackwell Oklahoma facility.

Peter Matt: The new line will allow CMC to better supply the growing demand for our latest higher margin geo-grade offering, as well as reduced logistics costs to several key North American geographies.

Peter Matt: On the inorganic front, we have developed a game plan for meaningful growth into a draft of adjacencies in which we believe we have a clear right to play given CMC's current commercial participation, customer knowledge, market positioning, and operational capabilities. We are targeting segments of the 150 billion early stage construction market that touch the types of projects we are already serving and feature higher, more stable margins. These adjacencies should also benefit from the mega trends that are expected to drive construction activity for years to come, which include infrastructure investment, reshoring, and the general scarcity of labor.

Peter Matt: I'm the Interorganic Front.

Peter Matt: We have developed the game plan for meaningful growth into a draft of adjacencies.

Peter Matt: In which we believe we have a clear right to play given CMC's current commercial participation, customer knowledge, market positioning and operational capabilities.

Peter Matt: We are targeting segments of the 150 billion early stage construction market that touched the types of projects we are already serving and feature higher, more stable margins.

Peter Matt: These adjacencies should also benefit from the mega trends that are expected to drive construction activity for years to come, which include infrastructure investment, reshoring, and the general scarcity of labor.

Peter Matt: As you can tell, I am very pleased with our strong performance in 2024 and even more excited about our strategic path forward.

Peter Matt: As you can tell, I am very pleased with our strong performance in 2024, and even more excited about our strategic path forward. With that, I will now turn the discussion over to Paul to provide more detail on our financial results. Paul, thank you, Peter, and good morning to everyone on the call.

Paul Lawrence: With that, I will now turn the discussion over to Paul to provide more detail on our financial results. Paul, thank you, and good morning to everyone on the call. As noted earlier, we reported fiscal fourth quarter 2024 net earnings of 103.9 million, or 90 cents per diluted share, compared to prior year levels of 184.2 million in a dollar 56, respectively.

Paul Lawrence: As noted earlier, we reported fiscal fourth quarter, 2024, net earnings of 103.9 million or 90 cents per diluted share compared to prior year levels of 184.2 million in a dollar 56 respectively.

Paul Lawrence: Consolidated Corey Bada was 227.1 million for the fourth quarter of 2024, representing a 31 percent decline from the 327.7 million generated during the prior year period, but still an historically strong result. Slide 14 of the supplemental presentation illustrates the year-to-year changes in CMC's quarterly financial performance. Profitability at the North American Steel Group was negatively impacted by lower margins over scrap, while results at the Europe Steel Group benefited from significant cost reductions. Adjusted EBITDA was unchanged in CMC's emerging business group, and consolidated core EBITDA margin of 11.4 percent remained above average historical levels and compares to 14.8 percent a year ago.

Paul Lawrence: In solidated Cory, but Dow was 227.1 million for the fourth quarter of 2024, representing a 31% decline from the 327.7 million generated during the prior year period. But still, and historically strong result.

Paul Lawrence: Slide 14 of the Supplemental Presentation illustrates the year-to-year changes in CMC's quarterly financial performance.

Paul Lawrence: Profitability at the North American Steel Group was negatively impacted by lower margins over scrap. While results at the Europe Steel Group benefited from significant cost reductions.

Paul Lawrence: Adjusted Evita was unchanged in CMC's emerging business group.

Paul Lawrence: and Consolidated Corps, Eva Demargen of 11.4% remained above average historical levels and compares to 14.8% a year ago.

Paul Lawrence: CMC's North American Steel Group generated adjusted EBITDA of 210.9 million for the quarter, equal to $188 per ton of finished steel shipped. Segment adjusted EBITDA decreased 14 percent on a sequential quarter basis, driven primarily by lower margin over scrap costs on steel products. Results were also impacted by the P&L effect of selling higher cost inventory into a falling price environment. The adjusted EBITDA margins for the North American Steel Group at 13.5 percent compares to 14.7 percent in the third quarter. During the quarter, CMC incurred mill operational commissioning costs related to Arizona 2 of 15.1 million, excluding depreciation.

Paul Lawrence: DMC's North American Steel Group generated a justity of 210.9 million for the quarter, equal to $188 per ton of finished steel shipped.

Paul Lawrence: segment adjusted EVAD decrease 14% on a sequential quarter basis.

Paul Lawrence: Driven Primarily by Lower Margin over scrap cost on steel products.

Paul Lawrence: Results were also impacted by the piano effect of selling higher cost inventory into a falling price environment.

Paul Lawrence: The Adjusted Eve at Down Margin for the North American Steel Group, a 13.5% compares to 14.7% in the third quarter.

Paul Lawrence: Here in the corridor, CMC and Kurt Mill operational commissioning costs related to Arizona to a 15.1 million, excluding depreciation.

Paul Lawrence: Cost amounted to 25.3 million. Both figures are on a pre-tax basis and were up from the levels incurred in recent quarters due to the high cost of power during peak summer months and the time taken for some corrective outages that impacted our volumes. As Peter indicated earlier, demand for long-steel products was stable during the quarter. Finished steel shipments decreased by 1 percent on a sequential basis but were virtually unchanged when adjusted for the one fewer shipping day compared to the third quarter.

Paul Lawrence: including depreciation cost amounted to 25.3 million.

Paul Lawrence: Both figures are on a pre-tax basis and we're up from the levels incurred in recent quarters due to the high cost of power during peak summer months and time taken for some corrective outages that impacted our volumes.

Speaker Change: As Peter indicated earlier, demand for long steel products was stable during the quarter. Finish steel shipments decreased by 1% on a sequential basis, but we're virtually unchanged when adjusted for the one fuel or shipping day compared to the third quarter.

Paul Lawrence: Turning to slide 16 of the Supplemental Deck, our Europe Steel Group reported an adjusted EBITDA loss of 3.6 million for the fourth quarter of 2024. This compares to a loss of 4.2 million incurred in the third quarter. The sequential improvement was driven by lower controllable costs per tonne of steel ship, as well as a 7.4 percent increase in volumes. Financial performance during the fourth quarter continued a trend of improvement from the depressed levels of the fourth quarter of fiscal 2023 and the first quarter of fiscal 2024, during which time quarterly losses averaged 30 million, excluded the impact of energy rebate.

Speaker Change: Turning to slide 16 of the Supplemental Deck, our Europe Steel Group reported an adjusted event to a loss of 3.6 million for the fourth quarter of 2024. This compares to a loss of 4.2 million incurred in the third quarter.

Speaker Change: The Sequential Improvement was driven by lower controllable cost per tonne of steel ship, as well as a 7.4% increase in volumes.

Speaker Change: Financial Performance during the fourth quarter continued a trend of improvement from the depressed levels of the fourth quarter of fiscal 2023 and the first quarter of fiscal 2024 during which time quarterly losses averaged 30 million excluded the impact of energy rebates.

Paul Lawrence: As mentioned earlier, this improvement has resulted primarily from self-help cost management measures taken by our team in Poland. Margin levels have been range-bound between roughly $270 per ton and $290 per ton for the last five quarters, despite an improving Polish economic environment and positive developments within the Polish construction sector.

Speaker Change: As mentioned earlier, this improvement has resulted primarily from self-help, cost management measures taken by our team in Poland.

Speaker Change: Margin levels have been range bound between roughly $270 per ton and $290 per ton for the last five quarters, despite an improving Polish economic environment and positive developments within the Polish construction sector.

Paul Lawrence: We would expect margins to remain, however, under pressure until the level of rebar imports begin to receive a scenario that likely requires an economic recovery in Germany. Emerging business group, fourth quarter net sales of $195.6 million decreased by 3.7% on a quarter-over-quarter basis while adjusted EBITDA 42.5 million grew by 11.2%. The sequential improvement and profitability was driven by strong activity levels within our Tensar unit and good shipment levels of performance reinforcing steel. A richer sales next during the fourth quarter led to a 140 basis point increase in adjusted EBITDA margin compared to the third quarter of fiscal 2024.

Speaker Change: We would expect margins to remain, however, under pressure until the level of revar imports begin to receive. A scenario that likely requires an economic recovery in Germany.

Speaker Change: The emerging business group, fourth quarter, net sales of $195.6 million, decreased by 3.7% on a quarter over quarter basis, while adjusted even to 42.5 million, grew by 11.2%.

Speaker Change: The sequential improvement and profitability was driven by strong activity levels within our tenths our unit in good shipment levels of performance, reinforcing steel.

Speaker Change: A richer sales next during the fourth quarter led to a 140 basis point increase in the juxtapity of a death margin compared to the third quarter of fiscal 2024.

Paul Lawrence: Notably, Tensar achieved its most profitable quarter as a division of CMC, driven by continued adoption of its latest geo grid solution and improved production performance. As of August 31st, cash and cash equivalents totaled $857.9 million. In addition, we had approximately $826 million of availability under our credit and accounts receivable facilities, bringing total liquidity to just under $1.7 billion. During the quarter, we generated $351.8 million of cash from operating activities, which included an impressive $176.9 million release of cash from working capital as we navigate through this period of uncertainty that Peter commented on. Couple expenditures of $81.5 million were driven by construction activity related to steel, West Virginia, and Micromil project.

Speaker Change: Notably, 10-star achieved its most profitable quarter as a division of CMC driven by continued adoption of its latest geo-bred solution and improved production performance.

Speaker Change: As of August 31, Kasin Kasch equivalent total, 857.9 million. In addition, we had approximately 826 million of availability under our credit and accounts receivable facilities, bringing total liquidity to just under 1.7 billion.

Speaker Change: During the quarter, we generated 351.8 million of cash from operating activities, which included an impressive 176.9 million release of cash from working capital, as we navigate through this period of uncertainty that Peter common at on.

Speaker Change: Apple expenditures of 81.5 million were driven by construction activity related to steel, West Virginia, micro-mil project.

Paul Lawrence: CMC's leverage metrics remain attractive and improve significantly over the last fiscal years. As can be seen by slide 21, our net debt to EBITDA ratio now sits at just 0.3 times, while net debt to capitalization is only 6%. We believe our robust balance sheet and overall financial strength provide us flexibility to finance our strategic, organic growth projects and pursue opportunistic M&A while continuing to return cash to shareholders. CMC's effective tax rate was 22.3% in the fourth quarter and 23.6% for the full year. Looking ahead, we anticipate an effective full year tax rate of between 24 and 25% for the fiscal 2025 year.

Speaker Change: The MC's level of leverage metrics remain attractive and improve significantly over the last fiscal years. I can be seen by slide 21, our net debt to Eva Doraesio now sits at just 0.3 times. Well, net debt to capitalization is only 6%.

Speaker Change: We believe our robust balance sheet and overall financial strength provide us flexibility to finance our strategic organic growth projects and pursue opportunistic M&A while continuing to return cash to shareholders.

Speaker Change: MC is effective tax rate was 22.3% in the fourth quarter and 23.6% for the full year. Looking ahead, we anticipate the effective full year tax rate of between 24 and 25% for the fiscal 2025 year.

Paul Lawrence: Turning to CMC's fiscal 2025 capital spending outlook, we expect to invest between 630 and 680 million in total. Outside of normal sustaining investments of approximately 250 million, expenditures in 2025 will include substantial capital dollars for the construction of Steel, West Virginia. Virginia. Approximately 200 million of spending related to Stil West Virginia was deferred from fiscal 2024 into 2025 related to payment timing. As Peter mentioned, we are on track to begin commissioning in late calendar 2025.

Speaker Change: Learning the CMC's fiscal 2025 capital spending outlook, we expect to invest between 630 and 680 million in total.

Speaker Change: Outside of normal sustaining investments of approximately 250 million expenditures and 2025 will include substantial capital dollars for the construction of steel West Virginia.

Speaker Change: Approximately 200 million of spending related to Steel West Virginia was deferred from fiscal 2024 into 2025 related to payment timing.

Speaker Change: As Peter mentioned, we are on track to begin the commissioning in late calendar 2025.

Paul Lawrence: As I've lined on past earnings call, CMC targets a prudent and balanced approach to capital allocation. Our first priority is the value of creative growth that furthers our strategy and strengthens our business. Second is providing our shareholders with an attractive level of cash distributions in the form of both dividends and share repurchases. To this end, CMC returned approximately 261.8 million to our shareholders in fiscal 2024, equal to 54% of net earnings. Looking at the fourth quarter, CMC repurchased approximately 1 million shares at an average price of $54.71 per share. As of August 31, we had 403.8 million available for repurchase under our current authorization.

Speaker Change: As outlined on past earnings call, CMC targets a prudent and balanced approach to capital allocation.

Speaker Change: Our first priority is value a creative growth that furthers our strategy and strengthens our business.

Speaker Change: Second is providing our shareholders with an attractive level of cash distributions in the form of both dividends and share repurchases.

Speaker Change: So this end, CMC returned approximately 261.8 million to our shareholder's in fiscal 2024. Equal to 54% of net earnings.

Speaker Change: Looking at the fourth quarter, CMC repurchased approximately 1 million shares on average price of $54.71 per share.

Speaker Change: As of August 31st, we had 403.8 million available for repurchase under our current authorization.

Peter Matt: Now turn it back to Peter for additional comments on CMC's financial outlook. Thank you, Paul. Excuse me, we expect consolidated financial results in our first fiscal quarter of 2025 to decline from the fourth quarter level as a consequence of temporary softness within certain areas of the construction industry amid continued macroeconomic uncertainty. Finished deal shipments within the North Marcus deal group are anticipated to follow normal seasonal trends, while the Adjusted EBITDA margin is expected to decrease on lower steel product margins over scrap costs. We would note that the recent encouraging direction of scrap pricing gives us confidence that rebar pricing has come near the bottom and should begin to move upward if a scrap rebound is maintained.

Speaker Change: Now turn it back to Peter for additional comments on CMC's financial outlook.

Peter Matt: Thank you, Paul, excuse me.

Peter Matt: We expect consolidated financial results in our first fiscal quarter of 2025 to decline from the fourth quarter level as a consequence of temporary softness within certain areas of the construction industry amid continued macroeconomic uncertainty.

Peter Matt: Finish deals shipments within the North America Steel Group are anticipated to follow a normal seasonal trends. While the Adjusted Eva Domargin is expected to decrease on lower steel product margins over scrap costs.

Peter Matt: We would note that the recent encouraging direction of scrap pricing gives us confidence that rebark pricing has come near the bottom and should begin to move upward if a scrap rebound is maintained.

Peter Matt: Adjusted EBITDA for our Europe Steel Group should experience meaningful sequential increase driven by the receipt of an annual CO2 credit that is expected to be within the range of $35 to $40 million. Underlying financial performance for the Europe Steel Group is likely to remain similar to the fourth quarter levels. Financial results for the emerging businesses group are anticipated to decline due to normal seasonality and the impact of economic uncertainty, both in the United States and in Europe. We believe the current market conditions represent a transient period of softness created by uncertainty regarding important factors that influence any major capital investment, the cost of funding, and future government policy.

Peter Matt: Adjusted Eva Dopp for our Europe Steel Group should experience meaningful sequential increase driven by the receipt of an annual CO2 credit that is expected to be within the range of 35 to 40 million dollars.

Peter Matt: Underlying financial performance for the Europe's CEO group is likely to remain similar to the fourth quarter levels.

Peter Matt: Financial Results for the Emerging Business Group are anticipated to decline due to normal seasonality and the impact of economic uncertainty both in the United States and in Europe.

Peter Matt: We believe the current market conditions represent a transient period of softness created by uncertainty regarding important factors that influence any major capital investment, the cost of funding and future government policy.

Peter Matt: As clarity emerges in the coming months, we believe renewed strength in our core markets will follow. We anticipate the first half of the year will be impacted by challenges related to the current uncertainty, as well as typical seasonal slowness. However, we expect financial results to rebound in the second half as solid construction fundamentals return.

Peter Matt: As clarity emerges in the coming months, we believe renewed strength in our core markets will follow.

Peter Matt: We anticipate the first half of the year will be impacted by challenges related to the current uncertainty.

Peter Matt: as well as typical seasonal slowness. However, we expect financial results to rebound in the second half as solid construction fundamentals return.

Peter Matt: Before we open the call up to questions, I want to reiterate how proud we are of CMC's financial results and the strong industry that we help create. We are excited about our potential to reach new heights in the future as we execute on our key strategic priorities and deliver significant value for our shareholders. As we move past near-term uncertainty, CMC is well positioned to benefit from powerful structural trends in North America that should drive construction activity for years to come. I would like to thank our customers for trusting confidence in CMC and all of our employees for delivering yet another quarter of solid operating performance.

Peter Matt: Before we open the call up to questions, I want to reiterate how proud we are of SAMC's financial results and the strong industry that we help create. We are excited about our potential to reach new heights in the future as we execute on our key strategic priorities and deliver significant value for our shareholders.

Peter Matt: As we met move past near-term uncertainty, CMC is well positioned to benefit from powerful structural trends in North America that should drive construction activity for years to come.

Peter Matt: I would like to thank our customers for their trusting confidence in CMC and all of our employees for delivering yet another quarter of solid operating performance.

Unknown Executive: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Again, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster.

Peter Matt: Operator.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star than one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star than two.

Speaker Change: Again, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster.

Sathish Kasinathan: The first question comes from Sathish Kasinathan with Bank of America. Please go ahead. Hi, good morning. Thanks for taking my questions. So my first question is on the guidance for the emerging business group. So you indicated that the segment results could be lower on a sequential basis, but how should we look at it from a year-on-year basis, given that you are continue to see an increase in higher margin mix, especially at tenser?

Speaker Change: The first question comes from Sathish.

Speaker Change: with Bank of America. Please go ahead.

Sathish: Oh, yeah, hi, good morning. Thanks for taking my questions.

Sathish: So my first question is on the guidance for the emerging business group, so you indicated that the segment results could be.

Sathish: Lover on a sequential basis, but how should we look at it from an year on your basis, given that you are going to see an increase in higher margin makes, especially at Tenza.

Paul Lawrence: Yeah, I think we should expect it to be roughly similar. Again, it's really seasonal trends that we're calling out here, and if you remember, that business tends to have a very strong Q3 and Q4, even more seasonality than in the rest of our business. Okay, thank you.

Speaker Change: Yeah, I think we should expect it to be roughly similar. Again, it's really seasonal trends that we're calling out here. And if you remember, that business tends to have a very strong Q3 and Q4, even more seasonality than in the rest of our business.

Sathish Kasinathan: And then my next question is on the long-term strategic plan. So you talked about some of the examples of the initiatives that the company is working on. When do you think you will be in a position to quantify those benefits? Are there any low-hanging proofs that you could highlight? And we should see some immediate benefit in 2025?

Speaker Change: Okay. Thank you. And then my next question is on the long term strategic plan. So you talked about some of the examples of the initiative that the company is working on. When do you think you will be in a position to quantify those benefits? Are there any low hanging fruits that you could highlight? And we should see some immediate benefit in 2025.

Peter Matt: Yeah, thank you very much for the question. And we are really excited about our tag initiative as a source of meaningful kind of earnings benefit. This is a program that we have structured to be over three to four years, and we do expect there to be contribution in 2025. We have very clear goals internally for what this program is going to deliver.

Speaker Change: Thank you very much for the question and we are really excited about our tag initiative as a source of meaningful kind of earnings benefit. This is a program that...

Speaker Change: We have structured to be over three to four years.

Speaker Change: and we do expect there to be contribution in 2025. We have very clear goals internally.

Peter Matt: We are going to stop short on this call of sharing detail on specific numbers for 2025 in the period beyond because we are really at the starting point of the program. And let me just say a few words about that. What we have done is we have kind of created, as we said in the preparing marks, over 150 different initiatives. We've taken a small subset of that and moved them into a detailed planning phase, and then, in the case of some of them, into an execution phase. So we have a number of these initiatives that are now being executed across the company.

Speaker Change: For what this program is going to deliver, we are going to stop short on this call of sharing detail on specific numbers for 2025 and the period beyond, because we are really at the starting point of the program. And let me just say a few words about that.

Speaker Change: What we have done is...

Speaker Change: We have kind of created as we said in the Preparing Marks over 150 different initiatives.

Speaker Change: We've taken a small subset of that and moved them into a detailed planning phase and then in the case of some of them into an execution phase so we have a number of these initiatives that are now being executed across the company.

Peter Matt: And the early returns are very positive, but again, we want to get a little bit more traction before we share more detail on that. But we do fully expect to periodically update you on the progress of that, including some of the targets that we've said in what we've achieved.

Speaker Change: and the early returns are very positive but again we want to get a little bit more traction before we share more detail on that but we do fully expect to periodically update you on the progress of that.

Speaker Change: including some of the targets that we've said and what we've achieved.

Sathish Kasinathan: Thank you, Peter, for the color and congrats on a solid year. Thank you very much.

Speaker Change: Okay, thanks Peter for the color and congrats on our solid year. Thank you very much.

Katja Jancic: The next question comes from Katja Jancic with BMO Capital Markets. Please go ahead. Hi, thank you for taking my question. Staying a bit on the tag initiative, and I can appreciate, Peter, that you said you don't want to provide specifics right now. But let's say when we look at the current margins, they're above historical levels. When you say that you're targeting higher through the cycle margins, how does those stack up relative to the current margin environments? Are we talking about higher than where we are right now, or kind of maintaining the current levels?

Speaker Change: The next question comes from Katia Yansich with BMO Capital Markets. Please go ahead.

Katia Yansich: Hi, thank you for taking my questions.

Katia Yansich: Sting a bit on the tag initiative, and I can appreciate Peter that you said, you don't want to provide specifics right now, but let's say when we look at the current margins, there are above historical levels. When you say that you are targeting higher through the cycle margins, how does those stack up relative to the current margin environments? Are we talking about higher than where we are right now, or kind of maintaining the current levels?

Peter Matt: Well, so it's a great question. And what I would say is, is it, and I'm going to go back a few calls to some comments that I made where our goal, as you say, is higher through the cycle margins. And we believe that, as a consequence of the consolidation that's occurred and the current trade environment, that we are in an environment where we can and will and actually are delivering higher through-the-cycle margins. So, based on what's happened so far, we would challenge the kind of current thesis and the evaluation of our shares. Having said that, tag is only an incremental contributor to that.

Peter Matt: Well, so it's a great question and what I would say is it, and I'm going to go back a few calls to some comments that I made, where our goal, as you say, is higher through the cycle margins. And we believe that...

Peter Matt: As a consequence of the consolidation that's occurred and the current trade environment.

Peter Matt: that we are in an environment where we can and will and actually are delivering higher through the cycle margins. So based on what's happened so far we would challenge the current thesis and the evaluation of our shares.

Peter Matt: Having said that, tag is only an incremental contributor to that and what we believe is that over time as we ramp up these initiatives.

Peter Matt: And what we believe is that over time, as we ramp up these initiatives, we will be able to deliver incremental margins to our company. And what does that mean? What it means is, if we are in an environment where we are today, where we feel like we're kind of, we're not calling the bottom but we're kind of in the, let's call it the weaker part of what we think our business environment is going to experience, then tag will supplement and take us to higher margin levels than we've been at in the past. If we are in a market where things deteriorate further, Tag will help us defend margins like what we have today.

Peter Matt: We will be able to deliver incremental margins to our company.

Speaker Change: and what does that mean?

Speaker Change: What it means is...

Speaker Change: If we're in an environment where we are today, where we feel like we're not calling the bottom, but we're in the weaker part of what we think our business environment is going to experience, then tag will supplement and take us to higher margin levels than we've been at in the past.

Speaker Change: If we are in a market where things deteriorate further, Tad will help us defend margins like what we have today. In both cases, we think there's tremendous upside in the story and that's what we're really excited about. So hopefully that gives you some additional clarity of Katja.

Peter Matt: In both cases, we think there's tremendous upside in the story, and that's what we're really excited about.

Katja Jancic: So hopefully that gives you some additional clarity, Katya. No, thank you for that. And maybe, if I may, one more on the backlogs right now. I think you mentioned they're still solid. Can you write a little more clarity on the value of the backlog currently versus, let's say, last quarter? Yeah, good morning, Katya. You know, backlog from a volume perspective, really we continue to maintain a comparable level from either the end of the third quarter or 12 months ago. I think, as Peter alluded to, construction activity is becoming more competitive as projects are delayed coming to market.

Katia Yansich: No, thank you for that. And maybe if I may one more on the backlogs right now, I think you mentioned there's still solid. Can you write a little more clarity on the value of the backlog currently versus let's say last quarter?

Speaker Change: Yeah, good morning, Katcha. You know, backlog from a volume perspective, really, we continue to maintain a comparable level from either.

Speaker Change: the end of the third quarter or 12 months ago.

Speaker Change: I think as Peter alluded to construction activity is becoming more competitive as projects are delayed coming to market and as a result, that is squeezing the margin and squeezing the price attributable to new work that is...

Paul Lawrence: And as a result, that is squeezing the margin and squeezing the price attributable to new work that is actually being contracted. And so we are seeing a lower level of value associated to the backlog, and it's really tied to the underlying price of the rebar material that's in the backlog. So volumes continue to be good, and that's what fueled the business that really during the fourth quarter we saw very sequentially and year-over-year level volumes. But the value is lower than where it was 12 months ago. Okay, thank you.

Speaker Change: actually being contracted and so we are seeing a lower level of value associated to the back log and it's really tied to the underlying price of the revar material that's in the back log.

Speaker Change: Volumes continue to be good, and that's what fueled the business that really during the fourth quarter we saw very sequentially and year over year level volumes, but the value is lower than where it was 12 months ago.

Katja Jancic: Thank you, Katja.

Timna Tanners: The next question comes from Timna Tanners with Ulf Research. Please go ahead. Yeah, hey, good morning. I wanted to ask two kinds of higher-level questions.

Speaker Change: Okay, thank you.

Speaker Change: Thank you, Doctor. The next question comes from Tim the Tanners with Wolf Research. Please go ahead.

Timna Tanners: If we take a step back, first I wanted to ask about Arizona 2. And I look at my notes over the years of what you talked about with regard to the volume contribution. I think it was supposed to be 400,000 and then 250,000. But if you look at volumes in North America, 2024 fiscal year, even over two years, we're talking about 150, call it. So what's happening? Are you able to run full out? Are you running less other places? And how do you think about volumes going forward in a softer construction market? Yeah, well, let me comment.

Speaker Change: Yeah, hey, good morning. I wanted to ask two kind of higher level questions. If we take a step back, first I want to ask about Arizona too.

Speaker Change: and I look at my notes over the years of what you talked about with regard to the volume contribution. I think it was supposed to be 400,000 and then 250,000, but you look it.

Speaker Change: Williams, North America, 2024 fiscal year.

Speaker Change: Even over two years, we're talking about 150 call it. So what's happening that you able to run full out, are you running less other places? And how do you think about why I'm going forward in a softer construction market?

Timna Tanners: There's a couple of different questions in your question.

Peter Matt: So let me comment first on Arizona 2, and then we'll talk about, you know, kind of the run rate levels. So it's clear in Arizona 2 that we've had some challenges. You can see that in the fact that you know we continue to have additional startup costs running through the system. Having said that, I just want to remind everybody that we're doing a lot of very innovative things in this mill. And, as in any case where you're innovating, things don't happen linearly, and that's what our experience has been. However, what I would say is we are absolutely making progress, and we feel very comfortable that we are going to be able to get this up to full run rate, which is, you know, the expectation of our full run rate is 500,000 tons per annum.

Speaker Change: Yeah, well, let me comment. There's a couple different questions in your question. So let me comment first on Arizona too, and then we'll talk about, you know, kind of the run rate levels. So it's clear in Arizona too that we've had some challenges. You can see that in the fact that, you know, we continue to have additional startup costs running through the system. Having said that, I just want to remind everybody.

Speaker Change: that we're doing a lot of very innovative things in this mill and as in any case where you're innovating things don't happen linearly and that's what our experience is done.

Speaker Change: However, what I would say is we are absolutely making progress.

Speaker Change: and we feel very comfortable that we are going to be able to get this up to full run rate, which is the expectation of our full run rate is 500,000 tons per annum and 150,000 tons of that being in the form of merchants so that we can serve our customers across the country on a merchant basis. We feel very comfortable in that and based on what we can see.

Peter Matt: And 150,000 tons of that being in the form of merchants, so that we can serve our customers across the country on a merchant basis. We feel very comfortable in that. And based on what we can see, we believe and we're very confident that this mill is going to be a workhorse in our organization for years to come. So bear with us. It's not exactly where we wanted it to be, but I think we're confident we can get to a good place.

Speaker Change: We believe and we're very confident that this meal is going to be a workhorse in our organization for years to come. So bear with us, it's not exactly where we wanted it to be, but I think we're confident we can get to a good place.

Peter Matt: In terms of the demand in the market, clearly we are seeing some softness today. And the softness that we're seeing today is really, and again, when we talk about the first quarter, we're talking about really seasonal weakness. But it's clear to say, Tim, that there's some that there is uncertainty out there. We are going to be a discipline supplier to the market. And you've heard many talk about kind of value over volume; will be will be will be disciplined in that regard, but we do expect and we are optimistic that the construction demand is going to be strong.

Speaker Change: In terms of the demand in the market, you know, clearly we are seeing some softness today and the softness that we're seeing.

Speaker Change: Today is really, and again, when we talk about the first quarter, we're talking about really seasonal weakness, but it's clear to say, Tim, that there's uncertainty out there. We are going to be a discipline supplier to the market.

Speaker Change: and you've heard many talk about kind of value over volume, will be will be...

Speaker Change: will be disciplined in that regard, but we do expect and we are optimistic.

Timna Tanners: And certainly if you kind of talk about timing, we're we think we are in for a period of uncertainty over the next several months, but the back half of the year could be quite strong. And that's strength across all of our major segments: infrastructure, non-res, and residential. So hopefully that answers your question. Yeah, thanks a lot of partners. I appreciate it. So we'll see more of easy to potentially second half.

Speaker Change: that the construction demand is going to be strong and certainly if you kind of talk about timing work we think we are in for a period of uncertainty over the next several months but the back half of the year could be quite strong and that's

Speaker Change: Strength across all of our major segments, infrastructure, non-rads and residential. So hopefully that answers your question.

Speaker Change: Yeah, I think it's a lot of partner I appreciate it so we'll see more of them easy to potentially second half

Timna Tanners: And then the other question or questions are just around Europe. So I get that Germany is particularly weak and you're not getting too much improvement there. And I get that you also talked about self-help, which is great. But what if you know Germany isn't on a quick path to recover in this continues like what options you consider that you have? What would you model if you were in our seat? And I mean, how should we think about the sustainability of this kind of business? It's been tough. I get it. But you know, what are your options as you think higher level?

Speaker Change: and then the other questions or questions are just around Europe.

Speaker Change: So I get the Germany is particularly weak and you're not guiding to much improvement there and I get that you also talked about self-help, which is great, but what if Germany isn't on a quick path to recover in this continues? Like what options you consider that you have, what would you model if you were on our seat? I mean, how should we think about the sustainability of this kind of business? It's been tough. I get it, but what are your options as you think higher level?

Peter Matt: Yeah, well, look, I mean, I just want to remind everybody that this business has been a fantastic contributor to CMC over time. And if we look at it over the long term, it's generated returns well in excess of its cost of capital. If you look at it in the 23 timeframe, it generated over 300 million of EBITDA. So, so it's been a it's been a meaningful contributor, and it brings a lot to our company in terms of both construction trends. And also steel making skills. I mean, we, if you ask the people in our North American business, where some of the best steel makers in the company are, they'll say in Poland.

Speaker Change: Well, look, I mean, I just want to remind everybody that this business has been a fantastic contributor to CMC over time. And if we look at it over the long term, it's generated returns well in excess of its cost of capital. If you look at it in the 23-time frame, it generated over 300 million of EBITDA. So it's been a meaningful contributor. And...

Speaker Change: It brings a lot to our company in terms of both construction trends.

Speaker Change: and also steel-making skills. I mean, if you ask the people in our North American business where some of the best steel makers in the company are, they'll say, in Poland. So we're learning, we learn a lot from what they've been doing in part because of the environment that they're in.

Peter Matt: So we're learning we learn a lot from what they've been doing, what they've been doing in part because of the environment that they're in. We our current pace or our current belief is that Germany should start to see some signs of recovery either late 2025 or coming into 2026. That's what seems to be the consensus based on the number of conversations that we've had. On that basis, we are, you know, we are committed. We're absolutely committed to this come to this group. And it's a core part of our business. And again, one of the things that we really love about this team is that they're not settling for kind of the results that they currently have.

Speaker Change: We, our current, our current belief.

Speaker Change: is that Germany should start to see some signs of recovery either late 2025 or coming into 2026. That's what seems to be the consensus based on the number of conversations that we've had.

Speaker Change: Annapaces.

Speaker Change: We are committed to this group and it's a core part of our business and again, one of the things that we really love about this team is that they're not settling for kind of the results that they currently have.

Peter Matt: We are continuing to work on the convergence to break even, and based on what we've seen out of this team, we have every confidence that they're going to achieve that. And the last thing I would say, Tim, is that given the cost improvement that these guys have been able to demonstrate in the operation, when there is a recovery, the profitability should come back a lot quicker. I mean, if you look at the utilization rates that they're running out and the conversion costs that they've been able to maintain, this is a low cost operation, and we're confident in that.

Speaker Change: We are continuing to work on the convergence to break even and based on what we've seen out of this team, we have every confidence that they're going to achieve that. And the last thing I would say, Timna, is that given the cost improvement that these guys have been able to demonstrate in the operation,

Speaker Change: When there is a recovery

Speaker Change: The profitability should come back a lot quicker. I mean, if you look at the utilization rates if they're running out and the conversion costs that they've been able to maintain, this is a low cost operation and we're confident in that. So thank you for the question. The next question comes from Tristan Gresser with B&P Paribout Exxon. Please go ahead.

Timna Tanners: So thank you for the question.

Tristan Gresser: The next question comes from Tristan Gresser with B&P Paribas Exxon. Please go ahead. Yes, hi. Morning. Thank you for taking my questions. The first one is on the demand environment. So I understand that the pocket of weakness you mentioned that we are in the middle of because of the election. But in your presentation, you don't great at the estimated potential impact on rebar demand from infrastructure. I believe before you were thinking it could increase rebar demand by 15-17%. Roughly 1.5, 1.4 million ton, and now you have it down to 8%, 12%, so 0.6 million tons or 0.9.

Speaker Change: Yes, hi, morning and thank you for taking my questions. The first one is on the demand environment, so I understand that the pocket of weakness you mentioned, that we are in the middle off because of the election.

Speaker Change: But in your presentation now.

Speaker Change: You don't grade it, you estimated potential impact on the rebar demand from infrastructure I believe before.

Speaker Change: You were thinking it could increase rebardment by 15-17%.

Speaker Change: Roughly 1.5, 1.4 million tons, and now you have it down to 8% to up to 100.6 million tons, or 0.9.

Tristan Gresser: So quite a bit downgrade, and my understanding that the issue with the infrastructure was more timing than anything, but apparently the scale of it is also being revised now. So I was curious to see why you're looking at this a bit more cautiously, more than timing.

Speaker Change: Quite a bit downgrade and my understanding that the issue with the infrastructure was more timing than anything but apparently the scale of it is also you know being revised now where so I was curious to see why you're looking at this a bit more cautiously more than timing. Yeah, it's a great question and and I'll start and then Paul can add if I if I miss anything but so we we have been looking and trying to calibrate the question of what is the inflationary impact we've been through a period of high inflation on the actual infrastructure dollars that are spent.

Peter Matt: It's a great question, and I'll start, and then Paul can add if I miss anything. So we have been looking and trying to calibrate the question of what is the inflationary impact we've been through a period of high inflation on the actual infrastructure dollars that are spent. And our work, and it was interesting. There's a recent article out by PCA that suggests that the inflationary impact on the infrastructure spend could be somewhere in the range of 25 to 30%. And depending on the time, I think you can in some cases you can look at it as a 20-30% range.

Speaker Change: and our work and it was interesting. There's a recent article out by PCA that suggests that the inflationary impact on the infrastructure spend could be somewhere in the range of 25 to 30 percent.

Speaker Change: Um...

Speaker Change: and depending on the time, I think you can, in some cases, you can look at it as a 20 to 30% range.

Peter Matt: But call it as you will, 25-30% impact on that. That seems to corroborate what we have seen or what we are seeing in the market and the analysis that we've done. And so, as a consequence, we have adjusted our expectation. Now, part of this is not an easy estimate to come up with because, as you know, not all highway spending is federal. Some of it is coming from the states, and the states have been increasing their spend budgets. And the other thing, too, is inflation is now falling. So this is a moving target. So we have been kind of working to try to figure out what is the actual impact on the actual rebar tons that will be impacted.

Speaker Change: but call it as you will 25 to 30% impact on that. That seems to corroborate.

Speaker Change: What we have seen, or what we are seeing in the market and the analysis that we've done. And so I have a consequence.

Speaker Change: We have adjusted our expectation. Now, you know, part of this is this is not an easy estimate to come up with because as you know, not all highway spending is federal. Some of it is coming from the states and the states have been increasing their spend budgets.

Speaker Change: and the other thing too is inflation is now falling so this is a moving target so we have been kind of working to try to figure out what is the actual impact on the actual rebar tons that will be impacted and this is the conclusion that we've come to and that's why we are adjusting that number. Now having said that Tristan I want to just highlight the fact that it's still a huge number.

Peter Matt: And this is the conclusion that we've come to, and that's why we are adjusting that number. Now, having said that, Tristan, I want to just highlight the fact that it's still a huge number. And we think that is something that's going to underpin our company results over the years to come. And if you look at some of the recent data points out there about the amount of infrastructure spending that there has been, we've got something like 80% of the spending to go. So yes, I know it took longer to come. It took longer than we expected for it to come.

Speaker Change: and we think that is something that's going to underpin our company results over years to come.

Speaker Change: And if you look at some of the recent data points out there about the amount of infrastructure spending that there has been, we've got something like 80% of the spending to go. So yes, I know it took longer to come, it took longer than we expected for it to come. But the reality is it's here now, we're seeing it, we're seeing it across all of our geographies and we think it's going to remain strong. So, anyway, I hope that gives some clarity to your politics.

Tristan Gresser: But the reality is it's here now. We're seeing it. We're seeing it across all of our geographies. And we think it's going to remain strong. So anyway, I hope that gives some clarity to your policy. Thank you for that. That's really helpful and clear. And I understand it's not an easy estimate to come up with.

Speaker Change: and I think that hits it.

Speaker Change: Thank you for that, that's really helpful.

Peter Matt: And my second question on the merchant bar market. It seems to be correlated a bit with rebar. I mean, we've seen better pricing performance. It looks like in Europe, Williams or better, maybe in the US as well. So trying to get a bit, we talk a lot about rebar, but I was interested to get your perspective on the supply and demand dynamics in the US for merchant bar, if possible. Thank you. Yeah, there's a so the demand I would characterize the demand is really kind of consistent with what I say about rebar. It's good. It's not great.

Speaker Change: and Clear, and I understand it's not an EDS debate to come up with. And my second question on the merchant bar market, it seems decorelated with rebar, I mean we've seen better pricing performance, it looks like in Europe , Williams or better, maybe in the US as well. So, trying to get a bit, we talk a lot about rebar, but I was interested to get your perspective on the supply and demand dynamics in the US for merchant bar as it is possible. Thank you.

Speaker Change: Yeah, there's a, so the demand, I would characterize the demand as really kind of consistent with what I say about rebar, it's good, it's not great. There are, you know, kind of, again, you know that business goes mostly through service centers, service center, inventories are low and given some of the uncertainty that's affecting kind of our broader business, I think that's also affecting the merchant market. And you've seen there's been some recent kind of

Peter Matt: Again, you know that business goes mostly through service centers. Service center; inventories are low. And given some of the uncertainty that's affecting kind of our broader business, I think that's also affecting the merchant market. And you've seen there's been some recent kind of price adjustments in the merchant market. And in fact, we would say that the merchant market has been kind of a bigger cause of the recent decline in margins than the rebar market has. So put another way, rebar has actually been a little bit more stable in the current market than merchant is. In general, we think it's a great product.

Speaker Change: to price adjustments in the merchant market. And in fact, we would say that the merchant market has been kind of a bigger cause of the recent decline in margins than the Rebar market has. So put another way, Rebar has actually been a little bit more stable in the current market than merchant is. In general, we think it's a great product. We think it's obviously a core part of our portfolio. And we think we have high confidence in the ability to generate good returns from those products.

Peter Matt: We think it's obviously a core part of our portfolio. And we think we have high confidence in the ability to generate good returns from those products.

Tristan Gresser: All right, perfect. Thank you very much.

Phil Gibbs: The next question comes from Phil Gibbs with KeyBank Capital Markets. Please go ahead. Hey, good morning.

Speaker Change: Alright, perfect, thank you very much.

Speaker Change: The next question comes from Phil Gibbs with Keybank Capital Markets, please go ahead.

Phil Gibbs: Hey, Phil. I'm Phil. Can you just, and you may have made comments on it already, but can you just remind us what, where you're setting your fiscal 25 CapEx budget and how much of that is dedicated to some of these newer growth projects that you have on the horizon? Yeah, Phil, thanks for the question. Yes, we guided towards, you know, in the range of 630 to 680 million, with the preponderance of that clearly being related to steel, West Virginia. You know, there's really three buckets of spend that we have. We have, what I classify as our normal maintenance CapEx, and that's got more than just maintenance, but it also includes some smaller improvement type projects. But that runs at an annual level of around 250 million.

Speaker Change: Take a morning. Thank you all for being here.

Phil Gibbs: Can you just, and you may have made comments on it already, but can you just remind us where you're setting your fiscal 25th cap expudgeon and how much of that is dedicated to some of these newer growth projects that you have on the horizon.

Speaker Change: Yeah, Phil, thanks for the question. Yes, we guided towards in the range of 630 to 680 million with the preponderance of that clearly being related to steel, West Virginia. There's really three buckets of spend that we have. We have, what I classify as our normal...

Speaker Change: Maintenance, CapEx, and that's...

Speaker Change: Got more than just maintenance, but it also includes some smaller improvement type projects, but that runs at an annual level of around 250 million.

Phil Gibbs: And then you've got a bucket of growth outside the large projects, and for next year that's going to be in that sort of 80 to 100 million range, and then the balance of it is going to be steel, West Virginia. So, got some exciting organic growth projects that have very attractive returns, and so that's what's driving the CapEx in 2025 to be higher than where we've historically been. And then, when you look at inorganic opportunities, it certainly seems like a pillar or a focus of your team to continue to consummate in the years ahead. Do you have a view of whether or not this is going to be something you necessarily need to do annually?

Speaker Change: and then you've got a bucket of growth outside the large projects and for next year, that's going to be in that sort of 80 to 100 million range and then the balance of it is going to be Steel West Virginia. So got some exciting organic growth projects that have very attractive returns and so that's what's driving the CapEx in 2025 to be higher than where we've historically been.

Speaker Change: And then when you look at any organic opportunities, it certainly seems like a pillar or a focus of your team to continue to to

Speaker Change: Do you have a view of whether or not this is going to be something you necessarily need to do annually? I know that there always has to be a meeting of the minds on the target and timing and valuation.

Phil Gibbs: Certainly, I know that there always has to be a meeting of the minds on the target and timing evaluation, but you want to do, you know, one a year, you know, two a year. I mean, how big of a commitment should we think you're making inorganic opportunities as you grow that profile? Well, Phil, I would say we're committed for sure, but I would say we're going to be, we're going to value discipline over pace. So, you know, we're not going to rush into doing things that we don't think make economic sense just to get something done.

Speaker Change: Do you want to do, you know, one a year, you know, two a year, I mean, how big of a, how big of a, you know, commitment should we think you're making an organic opportunity as you grow that profile.

Speaker Change: Well, Phil, I would say we're committed for sure, but I would say we're going to be, we're going to value discipline over pace.

Speaker Change: So, you know, we're not going to rush into doing things that we don't think make economic sense just to get something done and again, you know, in our situation, I think it's really important that we...

Peter Matt: And again, you know, in our situation, I think it's really important that we prioritize discipline. So, that's going to be our goal. But we see a lot of, you know, on the positive side in terms of momentum there, we see a lot of areas that are potentially interesting areas that are, you know, kind of product categories that are coming into a construction site at the same time that we are. So, in the same time as our Geogrid or at the same time as our rebars coming into the construction site, high margins, take advantage of some of these mega trends in the industry like, you know, shortage of labor and so forth.

Speaker Change: We prioritize discipline so that's going to be our goal but we see a lot of you know on the positive side in terms of momentum there we see a lot of areas that are potentially interesting areas.

Speaker Change: that are kind of product categories that are coming into a construction site.

Speaker Change: At the same time that we are, so in the same time as our geogrid or the same time as our rebars coming into the construction site, high margins, take advantage of some of these mega trends in the industry, like shortage of labor and so forth.

Peter Matt: And we think that those businesses can be really nice compliments to what we're doing. And again, pull our overall margins higher, give us a broader portfolio of products, and that we can, over the longer term, develop real synergy.

Speaker Change: and we think that those businesses can be really nice compliments to what we're doing and again, pull our overall margins higher, give us a broader portfolio of products that we can over the longer-term develop real synergies between.

Phil Gibbs: between. Thank you. Thank you, Phil.

Phil Gibbs: Thank you. Thank you, Phil.

Peter Matt: Due to time constraints, I'd like to turn the conference back over to Mr. Matt. Please go ahead with your closing remarks. Okay. Thank you, everyone, for joining. At CMC, we remain confident that our best days are ahead. The combination of the structural demand trends we have noted, operational and commercial excellence initiatives to strengthen our through the cycle performance and value a creative growth opportunities creates an exciting future for our company. We are committed to a balanced capital allocation strategy that includes investments in our company's future and a return of capital to our shareholders.

Peter Matt: Due to time constraints, I'd like to turn the conference back over to Mr. Matt. Please go ahead with your closing remarks. Okay, thank you everyone for joining. At CMC, we remain confident that our best days are ahead. The combination of the structural demand trends we have noted, operational and commercial excellence initiatives to strengthen our through the cycle performance and value our creative growth opportunities, create an exciting future for our company.

Peter Matt: We are committed to a balanced capital allocation strategy that includes investments in our company's future and a return of capital to our shareholders.

Unknown Executive: Thank you for joining us on today's call. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Peter Matt: Thank you for joining us on today's call.

Peter Matt: The