Q4 2025 Commercial Metals Co Earnings Call & Acquisition of Foley Products Co

He is president and Chief Executive Officer, and Paul Lawrence Senior Vice President and Chief Financial Officer, today's materials, including the press releases and supplemental slides that accompany this call can be found on <unk> Investor Relations website.

Today's call is being recorded after the company's remarks, we will have a question and answer session and we'll have a few instructions at that time.

I would like to remind all participants that today's discussion contains forward looking statements, including with respect to economic conditions effects of legislation and trade actions U S. Steel import levels construction activity demand for finished steel products, the expected capabilities benefits cost and timeline for construction of new.

<unk> the benefits and impact of the pending acquisitions are fully products company and concrete pipe and precast the company's operations the company's strategic growth plan and its anticipated benefits legal proceedings, the company's future results of operations financial measures and capital spending.

These statements reflect the companys beliefs based on current conditions, but are subject to risks and uncertainties. The company's earnings release. Most recent annual report on Form 10-K, and other filings with the U S Securities and Exchange Commission contain additional information concerning factors that could cause actual results to differ materially from those.

Speaker #1: Hello and welcome, everyone, to the fiscal 2025 fourth quarter and year-end 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.

<unk> in forward looking statements.

Except as required by law CMC does not assume any obligation to update amend or clarify these statements.

Some numbers presented will be non-GAAP financial measures and reconciliations for such numbers can be found in the company's earnings release supplemental slide presentation or on the company's website.

Speaker #1: Today's materials, including the press releases and supplemental slides that accompany this call, can be found on CMC's investor relations website. Today's call is being recorded.

In addition, today's presentation includes financial information that gives effect to the consummation of pending acquisitions pro forma financial information is presented for illustrative purposes, only and is based on available information and certain assumptions and estimates that the company believes are reasonable.

Speaker #1: After the company's remarks, we will have a question-and-answer session, and we will have a few instructions at that time. I would like to remind all participants that today's discussion contains forward-looking statements, including with respect to economic conditions, effects of legislation and trade actions, U.S.

The pro forma financial information that may not necessarily reflect what the companys results of operations and financial position would have been had the transactions occurred during the periods discussed or what the companys results of operations and financial position will be in the future.

Speaker #1: steel import levels, construction activity, demand for finished steel products, the expected capabilities, benefits, costs, and timeline for construction of new facilities, the benefits and impact of the pending acquisitions, a fully product company and concrete, pipe, and precast, the company's operations, the company's strategic growth plan, and its anticipated benefits, legal proceedings, the company's future results of operations, financial measures, and capital spending.

Unless stated otherwise all references made to year or quarter end are references to the company's fiscal year or fiscal quarter.

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

Good morning, everyone and thank you for joining our conference call as you've likely already seen we have a lot of ground to cover today first we are excited to share more about CMC as agreement to acquire a four way products company after which we will cover our fourth quarter performance.

Speaker #1: These statements reflect the company's beliefs, based on current conditions but are subject to risks and uncertainties. The company's earnings release most recent annual report on Form 10-K and other filings with the U.S.

Speaker #1: Securities and Exchange Commission contain additional information concerning factors that could cause actual results to differ materially from those projected in forward-looking statements. Except as required by law, CMC does not assume any obligation to update, amend, or clarify these statements.

Fiscal 2025 strategic progress and our outlook before opening the call for questions to.

To supplement todays commentary, we have posted two presentations to our IR website, one for the <unk> acquisition, and one detailing our fourth quarter and fiscal 2025 results.

Speaker #1: Some numbers presented will be non-GAAP financial measures, and reconciliations for such numbers can be found in the company's earnings release, supplemental slide presentation, or on the company's website.

Starting with full we are thrilled to add best in class business with industry, leading margins to cmc's portfolio in combination with our recently announced acquisition of <unk>. The addition of <unk> will create a high quality large scale platform in the strategically attractive pre test.

Speaker #1: In addition, today's presentation includes financial information that gives effect to the consummation of pending acquisitions. Pro forma financial information is presented for illustrative purposes only and is based on available information and certain assumptions and estimates that the company believes are reasonable.

Industry greatly enhancing <unk> financial profile and growth over the long term I am confident that the acquisition of Foley, we'll increase our value proposition for customers and shareholders alike, extending our growth run rate and marking another major milestone as we execute our strategy.

Speaker #1: The pro forma financial information may not necessarily reflect what the company's result of operations and financial position would have been had the transactions occurred during the periods discussed or what the company's results of operations and financial position will be in the future.

Slide four of the acquisition presentation provides a brief overview of Foley since its founding by Frank fully over 40 years ago. The company has grown into the largest regional precast producer States with 580 employees, an 18 plants across nine states.

Speaker #1: Unless stated otherwise, all references made to year or quarter end are references to the company's fiscal year or fiscal quarter. And now, for opening remarks and introductions, I will turn the call over to Peter.

Speaker #2: Good morning, everyone, and thank you for joining our conference call. As you've likely already seen, we have a lot of ground to cover today.

<unk> has a strong track record of growth and best in class margin performance, which is a testament to our talented management team and the industry leading practices. They have developed we are very excited to welcome them to the CMC family and look forward to collaborating on Foleys continued success.

Speaker #2: First, we are excited to share more about CMC's agreement to acquire fully products company, after which we will cover our fourth quarter performance, fiscal 2025 strategic progress, and our outlook.

Speaker #2: Before opening the call to questions, to supplement today's commentary, we have posted two presentations to our IR website, one for the fully acquisition and one detailing our fourth quarter and fiscal 2025 results.

As you can see on slide seven. The addition of Foley in combination with our recently announced acquisition of C. Pnp creates immediate scale for Cmc's precast platform.

Speaker #2: Starting with Foley, we are thrilled to add the best-in-class business with industry-leading margins to CMC's portfolio. In combination with our recently announced acquisition of CP&P, the addition of Foley will create a high-quality, large-scale platform in the strategically attractive precast industry, greatly enhancing CMC's financial profile and growth over the long term.

Upon closing both transactions CMC will be the third largest pre test player in the U S and a leader across the mid Atlantic and southeast supported by 35 facilities across 14 states our strategic entry into pre cast will broaden our commercial portfolio to support our customers enhance our.

Our exposure to powerful structural trends in construction.

Offer new capabilities to address construction industry challenges and establish a new platform with a significant future runway.

Speaker #2: I am confident that the acquisition of Foley will increase our value proposition for customers and shareholders alike, extending our growth runway and marking another major milestone as we execute our strategy.

Slide eight helps illustrate fold these best in class operations, which will support our ability to build a broader pre cast platform and unlock further synergies with CPP.

Speaker #2: Slide four of the acquisition presentation provides a brief overview of Foley, since its founding by Frank Foley over 40 years ago, the company has grown into the largest regional precast producer in the United States, with 580 employees in 18 plants across nine states.

The left side of the page outlines all these industry, leading margin and cash flow profile, which has been consistent over time and is enabled by a highly efficient low cost operating model. The company has achieved sustained cost advantages through a combination of centralized production planning.

Speaker #2: Foley has a strong track record of growth and best-in-class margin performance, which is a testament to their talented management team and the industry-leading practices they have developed.

Automation best in class manufacturing practices, low cost support functions and optimize logistics.

Speaker #2: We are very excited to welcome them to the CMC family and look forward to collaborating on Foley's continued success. As you can see on slide seven, the addition of Foley in combination with our recently announced acquisition of CP&P creates immediate scale for CMC's precast platform.

Foley has also developed a winning commercial formula with leading design and engineering capabilities lead times and product quality with the most comprehensive product portfolio of any pre cast supplier within its core regions fully as a true one stop shop for many construction applications. These.

Speaker #2: Upon closing both transactions, CMC will be the third largest precast player in the U.S., and a leader across the Mid-Atlantic and Southeast, supported by 35 facilities across 14 states.

All of these have given the company enduring competitive advantages, which CMC will seek to preserve and strengthen.

As highlighted on slide nine fully and <unk> have highly complementary footprints and we see many meaningful synergy opportunities between the two companies. We expect the acquisition of Foley to generate annual run rate synergies of approximately $25 million to $30 million of EBITDA.

Speaker #2: Our strategic entry into precast will broaden our commercial portfolio to support our customers, enhance our exposure to powerful structural trends in construction, offer new capabilities to address construction industry challenges, and establish a new platform with a significant future runway.

By year three in addition to the $5 million to $10 million of EBITDA. We originally identified for <unk>. The majority of this benefit will be will be driven by applying best practices across our platform, including optimized production planning manufacturing efficiencies and a simplified.

Speaker #2: Slide eight helps illustrate Foley's best-in-class operations, which will support our ability to build a broader precast platform and unlock further synergies with CP&P. The left side of the page outlines Foley's industry-leading margin and cash flow profile, which has been consistent over time, and is enabled by a highly efficient low-cost operating model.

Structure for support functions.

Expected improvement equates to roughly 35% to 40% of see Pmt's forecasted 2025, EBITDA consistent with our previous commentary that synergies would become more significant as our precast platform gained scale. It is worth pointing out that meaningful commercial.

Speaker #2: The company has achieved sustained cost advantages through a combination of centralized production planning, automation, best-in-class manufacturing practices, low-cost support functions, and optimized logistics. Foley has also developed a winning commercial formula with leading design and engineering capabilities, lead times, and product quality.

<unk> synergies are likely to emerge but have not been included in our initial synergy estimate.

On slide 10, we illustrate foley's highly complementary proximity to both CMC and <unk> networks, which we believe will facilitate optimal coordination to achieve operational synergies and over the long term longer term substantial commercial opportunities.

Speaker #2: With the most comprehensive product portfolio of any precast supplier within its core regions, Foley is a true one-stop shop for many construction applications. These capabilities have given the company enduring competitive advantages, which CMC will seek to preserve and strengthen.

<unk>.

Speaker #2: As highlighted on slide nine, Foley and CP&P have highly complementary footprints, and we see many meaningful synergy opportunities between the two companies. We expect the acquisition of Foley to generate annual run-rate synergies of approximately $25 million to $30 million of EBITDA by year three, in addition to the $5 million to $10 million of EBITDA we originally identified for CP&P.

As you can see every pre cast site when the eastern and Western U S is located near a CMC rebar mill or fabrication plant, allowing us to maximize value over time through close coordination across commercial operational and support functions. In particular, we are excited by.

The increased value, we can bring to customers in these regions by providing cmc's full suite of early stage construction solutions from site preparation to structural erection.

Speaker #2: The majority of this benefit will be driven by applying best practices across our platform, including optimized production planning, manufacturing efficiencies, and a simplified structure for support functions.

Our offering will be unique in the marketplace and we will grow more compelling over time as we integrate our portfolio and offer attractive turnkey solutions.

Speaker #2: The expected improvement equates to roughly 35 to 40 percent of CP&P's forecasted 2025 EBITDA, consistent with our previous commentary that synergies would become more significant as our precast platform gains scale.

While a vast majority of the acquired precast facilities are located within one of Cmc's densest geographic regions. We will also operate one satellite location in Louisiana and three satellite locations in the Western U S, which will provide beachheads in those regions and off.

Speaker #2: It is worth pointing out that meaningful commercial synergies are likely to emerge but have not been included in our initial synergy estimate. On slide ten, we illustrate Foley's highly complementary proximity to both CMC and CP&P networks, which we believe will facilitate optimal coordination to achieve operational synergies and, over the longer term, substantial commercial opportunities.

The opportunity for profitable bolt on growth in the future.

To conclude my comments on Foley when we began our study of the precast space nearly two years ago. We immediately identified Foley as a best in class operator based on its reputation it standing among customers and its top tier financial profile in the construction materials sector, our due diligence.

Confirm foley's attractiveness as a strong business and drove us to execute on this unique opportunity I am incredibly excited about both of these announcements and I am confident that the additions of Foley <unk> will unlock further upside as the cornerstones of our newly created.

Speaker #2: As you can see, every precast site in the eastern and western U.S. is located near a CMC rebar mill or fabrication plant, allowing us to maximize value over time through close coordination across commercial operational and support functions.

Speaker #2: In particular, we are excited by the increased value we can bring to customers in these regions by providing CMC's full suite of early-stage construction solutions, from site preparation to structural erection.

<unk> pre cost platform.

Both businesses together will position us to drive significant value for our customers and shareholders alike.

With that summary of the deal rationale I'll turn the call over to Paul to discuss the financial details Paul.

Speaker #2: Our offering will be unique in the marketplace and will grow more compelling over time as we integrate our portfolio and offer attractive turnkey solutions.

Thank you Peter and good morning to everyone on the call I'll start by saying I share the excitement and optimism both about this transaction and the strategic momentum we have achieved at CMC over the last year.

Speaker #2: While a vast majority of the acquired precast facilities are located within one of CMC's densest geographic regions, we will also operate one satellite location in Louisiana and three satellite locations in the western U.S.

The acquisition of fully in combination with <unk> is transformative to CMC as financial profile.

As shown on slide 11, the creation of the new pre cast platform meaningfully shifts the composition of CMC earnings <unk>.

Speaker #2: which will provide beachheads in those regions and offer the opportunity for profitable bolt-on growth in the future. To conclude my comments on Foley, when we began our study of the precast space nearly two years ago, we immediately identified Foley as a best-in-class operator based on its reputation, its standing among customers, and its top-tier financial profile in the construction materials sector.

Increases margin levels and free cash flow capabilities.

And importantly should reduce earnings and cash flow volatility in our business.

The sum of SAP, Pnp and fully representing our precast platform is expected to generate approximately $250 million of adjusted EBITDA in calendar 2025.

Speaker #2: Our due diligence confirmed Foley's attractiveness as a strong business and drove us to execute on this unique opportunity. I am incredibly excited about both of these announcements and I am confident that the additions of Foley and CP&P will unlock further upside as the cornerstones of our newly created precast platform.

<unk> growth and synergies with EBITDA margins in excess of 34%.

This compares to Cmc's core EBITDA margin of 10, 7% in the North American Steel group adjusted EBITDA margin of 12, 2% in fiscal 2025.

The addition of these levels of earnings by the precast operations, while significantly shifting the composition of CMC as earnings increase in the combined contribution from our <unk> segment and precast platform to over 32% of total operating segment adjusted EBITDA.

Speaker #2: Both businesses together will position us to drive significant value for our customers and shareholders alike. With that summary of the deal rationale, I’ll turn the call over to Paul to discuss the financial details.

Speaker #2: Paul?

Speaker #3: Thank you, Peter, and good morning to everyone on the call. I will start by saying I share the excitement and optimism both about this transaction and the strategic momentum we have achieved at CMC over the last year.

Upon completion of the acquisitions, we expect nearly a third of our profitability will be generated by high value added solutions with attractive market penetration potential strong margins and cash flow conversion.

Speaker #3: The acquisition of Foley in combination with CP&P is transformative to CMC's financial profile. As shown on slide 11, the creation of the new precast platform, meaningfully shifts the composition of CMC earnings.

The lower capital intensity of these businesses also means they require less reinvestment to maintain operations and less capital commitment to grow organically enhancing free cash flows.

Speaker #3: Increases in margin levels and free cash flow capabilities, and importantly, should reduce earnings and cash flow volatility in our business. The sum of CP&P and Foley, representing our precast platform, is expected to generate approximately $250 million of adjusted EBITDA in calendar 2025.

Margin levels and normalized free cash flow conversion are both expected to increase meaningfully.

Just on Foley and <unk> forecasted results for 2025. The addition of Foley and <unk> would have increased cmc's core EBITDA margin by more than two percentage points and given the stability of these businesses. We anticipate this improvement to be sustained over time.

Speaker #3: The four growth and synergies with EBITDA margins in excess of 34 percent. This compares to CMC's core EBITDA margin of 10.7 percent and the North American Steel Group adjusted EBITDA margin of 12.2 percent in fiscal 2025.

In fiscal 2025 alone the platform would've improved normalized free cash flow conversion by over four percentage points.

Now I will cover the major terms related to the transaction.

Speaker #3: The addition of these levels of earnings by the precast operations will significantly shift the composition of CMC's earnings, increasing the combined contribution from our EBG segment and precast platform to over 32% of total operating segment adjusted EBITDA.

Total consideration will be paid at closing and is subject to customary working capital adjustments.

This valuation represents a 10 three times multiple on fully as expected calendar 2025, EBITDA importantly.

Importantly, the effective multiple is reduced to approximately nine two times when cash tax savings are considered as CMC and will benefit from a tax step up on assets.

Speaker #3: Upon completion of the acquisitions, we expect nearly a third of our profitability will be generated by high-value-added solutions with attractive market penetration potential, strong margins, and cash flow conversion.

We believe this is a fair valuation for a fantastic asset and the multiple reflects fully as best in class margin profile and business characteristics previously discussed by Peter.

Speaker #3: The lower capital intensity of these businesses also means they require less reinvestment to maintain operations and less capital commitment to grow organically, enhancing free cash flows.

It's worth noting fully as EBITDA margins are five to 10 percentage points higher than those of many blue chip building products and construction materials companies that routinely trade at 10 to 16 times forward EBITDA.

Speaker #3: Margin levels and normalized free cash flow conversion are both expected to increase meaningfully. Based on Foley and CP&P's forecasted results for 2025, the addition of Foley and CP&P would have increased CMC's core EBITDA margin by more than 2 percentage points, and given the stability of these businesses, we anticipate this improvement to be sustained over time.

Importantly, we anticipate the transaction to be immediately accretive to earnings and cash flow per share.

The combined total consideration of approximately $2 5 billion related to the purchases of fully and <unk> will be funded through a combination of cash on hand and committed bank financing.

As soon as feasible, we will seek to raise permanent debt financing in the form of corporate bond offerings.

Speaker #3: In fiscal 2025 alone, the platform would have improved normalized free cash flow conversion by over 4 percentage points. Now I will cover the major terms related to the transaction.

Immediately following the completion of both transactions, which is expected by the end of calendar 2025, <unk> net debt is expected to increase to approximately two seven times trailing 12 month adjusted combined EBITDA.

Speaker #3: Total consideration will be paid at closing and is subject to customary working capital adjustments. This valuation represents a 10.3 times multiple on Foley's expected calendar 2025 EBITDA.

As we have stated in the past we are comfortable with temporarily increasing net leverage above our long term target of two times for the right strategic opportunity.

Speaker #3: Importantly, the effective multiple is reduced to approximately 9.2 times, when cash tax savings are considered as CMC will benefit from a tax step-up on assets.

As we did with the highly successful acquisition of <unk> U S rebar business in 2019.

We will prioritize delevering in the quarters ahead with a goal of returning below two times net leverage within 18 months.

Speaker #3: We believe this is a fair valuation for a fantastic asset, and the multiple reflects Foley's best-in-class margin profile and business characteristics previously discussed by Peter.

This effort will be aided by strong free cash flow generation from the free cash platform itself the.

Speaker #3: It's worth noting Foley's EBITDA margins are 5 to 10 percentage points higher than those of many blue-chip building product and construction material companies that routinely trade at 10 to 16 times forward EBITDA.

The wind down of capital expenditures for the construction of steel of West Virginia and.

And significant cash tax savings related to the 48 Z program and the one big beautiful Bill.

Based on these supportive factors in the positive outlook for our existing business. We are confident in our ability to delever quickly.

Speaker #3: Importantly, we anticipate the transaction to be immediately accretive to earnings and cash flow per share. The combined total consideration of approximately 2.5 billion related to the purchases of Foley and CP&P will be funded through a combination of cash on hand and committed bank financing, as soon as feasible, we will seek to raise permanent debt financing in the form of corporate bond offerings.

That concludes my remarks and <unk>.

I'll turn it back to Peter to cover the fourth quarter and fiscal year.

Thank you Paul I will now turn to our earnings presentation. The goal of our strategy is to drive meaningful and sustainable improvements to Cmc's margins earnings cash flow and returns on capital, while reducing volatility in our business as you can see on slide five we are executing.

Speaker #3: Immediately following the completion of both transactions, which is expected by the end of calendar 2025, CMC's net debt is expected to increase to approximately 2.7 times trailing 12-month adjusted combined EBITDA.

Against this objective along three paths.

By investing in our people and pursuing excellence in all we do.

Speaker #3: As we have stated in the past, we are comfortable with temporarily increasing net leverage above our long-term target of 2 times for the right strategic opportunity.

Second by investing in value accretive organic growth and third by driving capability enhancing inorganic growth as we just discussed in detail.

Speaker #3: As we did with the highly successful acquisition of Gerdau's U.S. rebar business in 2019, we will prioritize deleveraging in the quarters ahead, with a goal of returning below 2 times net leverage within 18 months.

Each of these objectives represents a significant opportunity for CMC.

And taken together will be game changing for our returns scale and ultimately the value we create for investors, we made tremendous progress across each of these strategic paths over the last year and slide six outlines some of our most notable accomplishments I'll start.

Speaker #3: This effort will be aided by strong free cash flow generation from the precast platform itself, the wind-down of capital expenditures for the construction of steel West Virginia, and significant cash tax savings related to the 48C program and the one big beautiful bill.

With investing in our people and pursuing excellence.

As I've said before the most important investment we can make in our people is to keep them safe on the job and I am proud to report our fiscal 2025 was the safest year in our company's history and marked the third consecutive year of record safety performance the job of improving safety.

Speaker #3: Based on these supportive factors and the positive outlook for our existing business, we are confident in our ability to delever quickly. That concludes my remarks, and I'll turn it back to Peter to cover the fourth quarter and fiscal year.

Speaker #1: Thank you, Paul. I will now turn to our earnings presentation. The goal of our strategy is to drive meaningful and sustainable improvements to CMC's margins, earnings, cash flow, and returns on capital while reducing volatility in our business.

He has never done, but we are in excellent position to maintain our momentum and cement our position as truly world class.

During the year, we also invested in the leadership talent and resources that will support strategic execution across our organization.

Speaker #1: As you can see on slide five, we are executing against this objective along three paths. First, by investing in our people and pursuing excellence in all we do.

Within our emerging businesses group, we now have in place a group of veteran leaders, who are poised to drive <unk> segment performance to New Heights, we are already seeing early dividends in our CMC construction services and performance reinforcing steel divisions, as new sales and margin.

Speaker #1: Second, by investing in value-accretive organic growth. And third, by driving capability-enhancing inorganic growth as we just discussed in detail. Each of these objectives represents a significant opportunity for CMC and, taken together, will be game-changing for our returns, scale, and ultimately the value we create for investors.

<unk> take hold.

In fiscal 2025, we also streamlined reporting structures and our North America steel group to facilitate decision, making and provide optimal coordination and supporting key initiatives, including our tag program efforts.

Speaker #1: We made tremendous progress across each of these strategic paths over the last year, and slide six outlines some of our most notable accomplishments. I'll start with investing in our people and pursuing excellence.

On the topic of tag, we began execution of our operational and commercial excellence program in fiscal 2025, and I could not be prouder of the progress. The CMC team achieved during the year not only did we generate $50 million in EBITDA benefits well in excess of the <unk>.

Speaker #1: As I've said before, the most important investment we can make in our people is to keep them safe on the job, and I am proud to report that fiscal 2025 was the safest year in our company's history and marked the third consecutive year of record safety performance.

$40 million, we expected, but we also successfully identified additional opportunities to reduce cost increase efficiencies.

Speaker #1: The job of improving safety is never done, but we are in an excellent position to maintain our momentum and cement our position as truly world-class.

<unk> and drive profitable sales in the future looking ahead, I am more confident than ever in this program's ability to drive meaningful and sustained improvement to cmc's financial profile by the end of fiscal 2026, we now expect to generate a run rate annualized.

Speaker #1: During the year, we also invested in the leadership, talent, and resources that will support strategic execution across our organization. Within our Emerging Businesses Group, we now have in place a group of veteran leaders who are poised to drive EBG segment performance to new heights.

EBITDA benefit of more than $150 million with virtually no related capital investment.

The next strategic path is value accretive organic growth, which we anticipate will represent a meaningful source of new earnings and cash flow over the next several years, particularly as our Arizona, two and steel West Virginia Mill investments reached full operations I am pleased to report that we made.

Speaker #1: We are already seeing early dividends in our CMC construction services and performance-reinforcing steel divisions as new sales and margin initiatives take hold. Late in fiscal 2025, we also streamlined reporting structures in our North America Steel Group to facilitate decision-making and provide optimal coordination in supporting key initiatives, including our TAG program efforts.

Difficult progress on both projects during fiscal 2025, notably we achieved a full quarter of positive EBITDA and Arizona, two for which I would like to congratulate our team out west.

Speaker #1: On the topic of TAG, we began execution of our operational and commercial excellence program in fiscal 2025, and I could not be prouder of the progress the CMC team achieved during the year.

I would also like to highlight Cmc's attainment of an approximately $80 million net tax credit related to steel West Virginia under the 48 C program, which we will realize in fiscal 2026 and effectively reduces our capital investment in this project.

Speaker #1: Not only did we generate $50 million in EBITDA benefits, well in excess of the $40 million we expected, but we also successfully identified additional opportunities to reduce costs, increase efficiencies, cut waste, and drive profitable sales in the future.

Finally, turning to capability enhancing inorganic growth as I've already discussed at length. We have created a large scale precast platform with the announced acquisitions of Foley and <unk>. We believe this platform will greatly enhance cmc's financial profile.

Speaker #1: Looking ahead, I am more confident than ever in this program's ability to drive meaningful and sustained improvement to CMC's financial profile. By the end of fiscal 2026, we now expect to generate a run-rate annualized EBITDA benefit of more than $150 million, with virtually no related capital investment.

<unk>, our value to customers and provide an avenue for a meaningful long term growth.

Paul will cover the financials, but before this I would like to briefly reflect on our markets.

First in North America, a combination of resilient construction activity and a balanced supply landscape resulted in favorable conditions for both volumes and margins during the quarter.

Speaker #1: The next strategic path is value-accretive organic growth, which we anticipate will represent a meaningful source of new earnings and cash flow over the next several years.

Shipments of finished steel increased year over year and were unchanged from the prior quarter strong level.

Speaker #1: Particularly as our Arizona II and steel West Virginia mill investments reach full operations, I am pleased to report that we made significant progress on both projects during fiscal 2025.

<unk> bid volumes are best gauge of the construction pipeline remained healthy and were consistent with recent quarters as we continue to see strength across a number of key market segments, including public works Highway and bridge institutional buildings and data centers as we have indicated.

Speaker #1: Notably, we achieved a full quarter of positive EBITDA at Arizona II, for which I would like to congratulate our team out west. I would also like to highlight CMC's attainment of an approximately $80 million net tax credit related to steel in West Virginia under the 48C program, which we will realize in fiscal 2026 and effectively reduce our capital investment in this project.

<unk> previously, we see substantial pent up demand, particularly within nonresidential markets. This view is supported by historic strength in the Dodge momentum index or <unk> as well as recent conversations with many of our largest customers. The BMI leads construction activity.

Speaker #1: Finally, turning to capability-enhancing inorganic growth, as I've already discussed at length, we have created a large-scale precast platform with the announced acquisitions of Foley and CP&P.

By 12 to 18 months and reached a record high in September driven by growth that was broad based across several market segments. Additionally, our customers are increasingly bullish as they experienced a large inflow of projects into the pipeline related to energy generation.

Speaker #1: We believe this platform will greatly enhance CMC's financial profile, increase our value to customers, and provide an avenue for meaningful long-term growth. Paul will cover the financials, but before this, I would like to briefly reflect on our markets.

<unk> advanced manufacturing and LNG infrastructure.

When we look beyond the current environment, we remain confident that the emerging structural drivers will support construction activity over a multiyear period.

Speaker #1: First, in North America, a combination of resilient construction activity and a balanced supply landscape resulted in favorable conditions for both volumes and margins during the quarter.

These trends include investment in our nation's infrastructure reassuring industrial capacity growth in energy generation and transmission the build out of.

Speaker #1: Shipments of finished steel increased year-over-year and were unchanged from the prior quarter's strong level. Downstream bid volumes are best gauge of the construction pipeline, remained healthy, and were consistent with recent quarters as we continued to see strength across a number of key market segments including public works, highway and bridge, institutional buildings, and data centers.

Infrastructure as well as addressing a U S housing shortage of two to 4 million units as noted on slide 10 of the earnings presentation over two trillion of corporate investments across AI manufacturing shipping and logistics and energy have been announced in calendar 'twenty.

25 commencement of even a handful of related mega projects could provide a meaningful demand catalysts for cmc's products in the quarters ahead.

Speaker #1: As we have indicated previously, we see substantial pent-up demand, particularly within non-residential markets. This view is supported by historic strength in the Dodge Momentum Index (DMI), as well as recent conversations with many of our largest customers.

Moving on to profitability in this segment, we experienced a strong sequential expansion in north American steel product margins during the quarter, achieving the highest level in two years the improvement only partially reflects the impact of the June and July price announcements realized.

Speaker #1: The DMI leads construction activity by 12 to 18 months and reached a record high in September, driven by growth that was broad-based across several market segments.

Speaker #1: Additionally, our customers are increasingly bullish as they experience a large inflow of projects into the pipeline related to energy generation, reshoring, advanced manufacturing, and LNG infrastructure.

Pricing increased steadily throughout the quarter and we exited at a much higher level than the period average positioning us to further expand margins in the first quarter.

Within our downstream business, we have seen price levels on new bids rise in tandem with the mill rebar price, which should support average backlog pricing in the future as these higher priced bids are converted into new contract awards on the topic of backlog.

Speaker #1: When we look beyond the current environment, we remain confident that the emerging structural drivers will support construction activity over a multi-year period. These trends include investment in our nation's infrastructure reshoring industrial capacity, growth in energy generation and transmission, the build-out of AI infrastructure as well as addressing a U.S.

I would note that average pricing stabilized in the fourth quarter following more than two years of sequential quarterly declines from the post Covid peak.

Speaker #1: housing shortage of 2 to 4 million units. As noted on slide 10, of the earnings presentation, over $2 trillion of corporate investments across AI, manufacturing, shipping, and logistics, and energy have been announced in calendar 2025.

Before I move onto our other segments I would like to briefly update you on the status of the rebar trade case filed with the International Trade Commission or ITC back in June the petition alleges exporters located in Algeria, Bulgaria, Egypt, and Vietnam are guilty of.

Speaker #1: Commencement of even a handful of related megaprojects could provide a meaningful demand catalyst for CMC's products in the quarters ahead. Moving on to profitability in this segment, we experienced a strong sequential expansion in North American steel product margins during the quarter, achieving the highest level in two years.

Dumping material into the U S market and should be subject to corrective duties ranging up to 160% in.

In mid July the ITC ruled that the case has merit and is passed to the department of Commerce for further investigation base.

Based on the current case schedule, we expect a preliminary ruling on the anti dumping claims sometime in late calendar 2025, or early 2026. It is worth noting that since filing the case price levels have increased markedly on several rebar sizes often.

Speaker #1: The improvement only partially reflects the impact of the June and July price announcements. Realized pricing increased steadily throughout the quarter, and we exited at a much higher level than the period average, positioning us to further expand margins in the first quarter.

First from the subject countries.

Speaker #1: Within our downstream business, we have seen price levels on new bids rise in tandem with the mill rebar price, which should support average backlog pricing in the future as these higher price bids are converted into new contractor awards.

Turning to our emerging businesses group on slide 11 current conditions are supportive and we see encouraging signals regarding future activity, specifically solid quoting levels busy engineering firms and improved velocity of quote conversion into backlog.

Speaker #1: On the topic of backlog, I would note that average pricing stabilized in the fourth quarter following more than two years of sequential quarterly declines from the post-COVID peak.

One attractive element of the <unk> segment is the fact that our current solutions are underpenetrated in the market, which provides significant opportunities for growth as we drive product adoption. In addition to market expansion.

Speaker #1: Before I move on to our other segments, I would like to briefly update you on the status of the rebar trade case filed with the International Trade Commission, or ITC, back in June.

In our key proprietary products, we are winning share through the strong value proposition, while maintaining solid margins. This dynamic helped us achieve record segment profitability during the quarter as shipments of core solutions, such as interacts Geo grid Galba bar.

Speaker #1: The petition alleges that exporters located in Algeria, Bulgaria, Egypt, and Vietnam are guilty of dumping material into the U.S. market and should be subject to corrective duties ranging up to 160%.

<unk> and <unk> all increased from the prior year, we have outlined the unique capabilities of these products on prior calls and we continue to expect the bay along with <unk> other high value added offerings position the segment to achieve a consistent organic growth rate in the mid to high <unk>.

Speaker #1: In mid-July, the ITC ruled that the case has merit and has passed it to the Department of Commerce for further investigation. Based on the current case schedule, we expect a preliminary ruling on the anti-dumping claim sometime in late calendar 2025 or early 2026.

Single digits and EBITDA margins in the high teens.

Speaker #1: It is worth noting that since filing the case, price levels have increased markedly on several rebar sizes often sourced from the subject countries. Turning to our emerging businesses group on slide 11, current conditions are supportive, and we see encouraging signals regarding future activity specifically solid quoting levels, busy engineering firms, and improved velocity of quote conversion into backlog.

Finally for our Europe steel group conditions improved modestly from the third quarter demand continued to normalize as a result of solid Polish economic growth while on the supply side import flows ticked up slightly from recent quarters, but remain below.

The disruptive levels of a year ago.

During the fourth quarter, we saw metal margins recover to their highest marked in over two years aided by an improved price environment for merchant bar and wire Rod the green shoots that we've noted on recent earnings calls continued to mature. We are encouraged by recent developments of the EU is looking to bolster its true.

Speaker #1: One attractive element of the EBG segment is the fact that our current solutions are under-penetrated in the market, which provides significant opportunities for growth as we drive product adoption in addition to market expansion.

Good legislation with the implementation of a long term mechanism that will reduce existing quotas for foreign steel by nearly half.

Speaker #1: In our key proprietary products, we are winning share through the strong value proposition while maintaining solid margins. This dynamic helped us achieve record segment profitability during the quarter as shipments of core solutions such as Interax Geogrid, Galvabar, and Chromex all increased from the prior year.

And imports beyond those quotas would be subject to new higher tariffs, which are currently proposed at 50%.

Before turning the call over to Paul I would like to recognize the efforts of our world class employees. We have asked a lot of the team as we execute on our ambitious vision for the future and I am truly inspired by all that they have accomplished so far their efforts have been instrumental in laying the groundwork.

Speaker #1: We have outlined the unique capabilities of these products on prior calls, and we continue to expect that they, along with EBG's other high-value-added offerings, position the segment to achieve a consistent organic growth rate in the mid to high single digits and EBITDA margins in the high teens.

Four years of success ahead, and I look forward to maintaining that momentum in the new fiscal year with that I'll turn the call over to Paul to provide more color on the quarter Paul.

Speaker #1: Finally, for our Europe steel group, conditions improved modestly from the third quarter. Demand continued to normalize as a result of solid Polish economic growth, while on the supply side, import flows ticked up slightly from recent quarters but remained below the disruptive levels of a year ago.

Thank you Peter.

We reported fiscal fourth quarter 2025, net earnings of 151, 8 million or $1 35 per diluted share compared to net earnings of $103 9 million and net earnings per diluted share of <unk> 90 in the prior year period.

Speaker #1: During the fourth quarter, we saw metal margins recover to their highest mark in over two years, aided by an improved price environment for merchant bar and wire rod.

Excluding estimated net after tax charges of approximately $3 2 million.

Adjusted earnings for the quarter totaled $155 million or $1 37 per diluted share compared to $97 4 million and 84 cents per diluted share respectively in the prior year period.

Speaker #1: The green shoots that we have noted on recent earnings calls continued to mature. We are encouraged by recent developments, as the EU is looking to bolster its trade legislation with the implementation of a long-term mechanism that will reduce existing quotas for foreign steel by nearly half.

These adjustments consisted of a $3 $8 million pre tax expense for interest on the judgment amount associated with the previously disclosed litigation and.

Speaker #1: And imports beyond those quotas would be subject to new higher tariffs, which are currently proposed at 50 percent. Before turning the call over to Paul, I would like to recognize the efforts of our world-class employees.

An impairment charge of $3 4 million and a $2 9 million unrealized gain on designated commodity hedges.

Speaker #1: We have asked a lot of the team as we execute on our ambitious vision for the future, and I am truly inspired by all that they have accomplished so far.

During the fourth quarter of 2025, we modified our method of calculating adjusted EBITDA to exclude the impact of unrealized gains and losses from Undesked native commodity derivatives.

Speaker #1: Their efforts have been instrumental in laying the groundwork for years of success ahead, and I look forward to maintaining that momentum in the new fiscal year.

This change was primarily driven by heightened volatility in copper forward markets.

Which introduced significant noncash fluctuations unrelated to our core operations.

Speaker #1: With that, I'll turn the call over to Paul to provide more color on the quarter. Paul?

Speaker #3: Thank you, Peter. We reported fiscal fourth quarter 2025 net earnings of $151.8 million, or $1.35 per diluted share, compared to net earnings of $103.9 million and net earnings per diluted share of $0.90 in the prior year period.

The relevant financial figures, including historical numbers have been adjusted to reflect this change impacting consolidated adjusted earnings adjusted earnings per diluted share.

Adjusted EBITDA.

Corey.

And core EBITDA margin as well as North American Steel group adjusted segment EBITDA.

Speaker #3: Excluding estimated net after-tax charges of approximately 3.2 million, adjusted earnings for the quarter totaled $155 million, or $1.37 per diluted share, compared to $97.4 million and $0.84 per diluted share respectively in the prior year period.

Given the prominence of these metrics, we have published recast quarterly figures dating back to fiscal 2019, and a form 8-K filing accompanying our earnings release this morning.

We believe this change in reporting will provide a more representative view of our operating performance and cash generating capability.

Speaker #3: These adjustments consisted of a 3.8 million dollar pre-tax expense for interest on the judgment amount associated with the previously disclosed litigation, an impairment charge of 3.4 million, and a 2.9 million unrealized gain on undesignated commodity hedges.

Consolidated core EBITDA was 291 4 million for the fourth quarter of 2025, representing a 33% increase from the 219 million generated during the prior year period.

Speaker #3: During the fourth quarter of 2025, we modified our method of calculating adjusted EBITDA to exclude the impact of unrealized gains and losses from undesignated commodity derivatives.

Slide 14 of the supplemental presentation illustrates the year to year changes and CMC as quarterly financial performance.

Segment level adjusted EBITDA increased by 87 4 million in total with our North American Steel group contributing $36 6 million of improvement EDG, providing $8 1 million in the Europe steel growth delivering $42 7 million.

Speaker #3: This change was primarily driven by heightened volatility in copper forward markets. Which introduced significant non-cash fluctuations unrelated to our core operations. The relevant financial figures including historical numbers have been adjusted to reflect this change.

Our consolidated core EBITDA margin of 13, 8% compared to 11% in the prior year period.

Speaker #3: Impacting consolidated adjusted earnings, adjusted earnings per diluted share, adjusted EBITDA, core EBITDA, and core EBITDA margin, as well as North American Steel Group adjusted segment EBITDA.

Dmc's North American Steel group generated adjusted EBITDA of $239 4 million for the quarter equal to $207 per ton of finished steel shipped.

Speaker #3: Given the prominence of these metrics, we have published recast quarterly figures dating back to fiscal 2019 in a Form 8K filing accompanying our earnings release this morning.

Segment, adjusted EBITDA increased 18% compared to the prior year period, driven primarily by higher margin over scrap cost on steel products and contributions from our tag operational excellence efforts in particular scrap optimization.

Speaker #3: We believe this change in reporting will provide a more representative view of our operating performance and cash-generating capabilities. Consolidated core EBITDA was $291.4 million, for the fourth quarter of 2025.

Allied consumption reduction.

<unk> yield improvements and logistics optimization.

North American Steel group adjusted EBITDA margin of 14, 8% compares to 13% in the fourth quarter of 2024.

Speaker #3: Representing a 33 percent increase from the $219 million generated during the prior year period. Slide 14 of the supplemental presentation illustrates the year-to-year changes in CMC's quarterly financial performance.

Segment results also improved sequentially as steel product margins continued the expansion that began early in the third quarter.

As Peter noted, we exited the fourth quarter with steel prices on an upward trajectory and steel product metal margins $31 per ton above the period average setting the stage for us to generate strong margins in the first quarter of fiscal 2026.

Speaker #3: Segment-level adjusted EBITDA increased by $87.4 million in total, with our North American Steel Group contributing $36.6 million of improvement, EBG providing $8.1 million, and the Europe Steel Group delivering $42.7 million.

As indicated earlier demand for long steel products was resilient during the quarter Phil.

Speaker #3: The consolidated core EBITDA margin was 13.8 percent compared to 11 percent in the prior year period. CMC's North American Steel Group generated adjusted EBITDA of $239.4 million for the quarter, which is equal to $207.00 per ton of finished steel shipped.

Finished steel shipments increased by 3% compared to a year ago, while rebar shipments from CMC Mills and downstream operations grew at a similar rate.

The emerging business group fourth quarter net sales of $221 8 million increased by 13, 4% on a year over year basis, while adjusted EBITDA of $56 million increased by 19, 1%.

Speaker #3: Segment adjusted EBITDA increased 18 percent compared to the prior year period, driven primarily by higher margin over scrap cost on steel products and contributions from our TAG operational excellence efforts.

The improvement was largely driven by three factors.

Strong demand for Geo grids and proprietary products within Cmc's performance reinforcing steel division.

Speaker #3: In particular, scrap optimization, alloy consumption reduction, process yield improvements, and logistics optimization. North American Steel Group adjusted EBITDA margin of 14.8 percent compares to 13 percent in the fourth quarter of 2024.

Improved hence our cost performance and.

And the impact of commercial initiatives within our CMC construction services Division.

Turning to slide 17 of the earnings presentation, Our Europe still group reported adjusted EBITDA of $39 1 million for the fourth quarter of 2025 compared to a loss of $3 6 million in the prior year period.

Speaker #3: Segment results also improved sequentially as steel product margins continued the expansion that began early in the third quarter. As Peter noted, we exited the fourth quarter with steel prices on an upward trajectory and steel product metal margins $31.00 per ton above the period average, setting the stage for us to generate strong margins in the first quarter of fiscal 2026.

Segment, adjusted EBITDA margin of 14, 8% increased from negative one 6% a year ago.

The biggest driver of improved profitability was the receipt of a $31 million Cotwo credit, which was the first of two payments that will be received this calendar year as part of the government energy cost reimbursement program in place through 2030.

Speaker #3: As indicated earlier, demand for long steel products was resilient during the quarter. Finished steel shipments increased by 3 percent compared to a year ago, while rebar shipments from CMC's mills and downstream operations grew at a similar rate.

Excluding this operational results improved by $11 7 million driven by higher margins, a 17% increase in shipment volumes and ongoing cost management efforts.

Speaker #3: Emerging Business Group fourth quarter net sales of $221.8 million increased by 13.4 percent on a year-over-year basis, while adjusted EBITDA of $50.6 million increased by 19.1 percent.

Similar to recent quarters the team in Poland continues to drive efficiency gains with success in nearly every major cost category, including labor.

Mobile usage.

Speaker #3: The improvement was largely driven by three factors: strong demand for geogrids and proprietary products within CMC's performance-reinforcing steel division, improved tensile cost performance, and the impact of commercial initiatives within our CMC Construction Services division.

Lloyds and overhead.

Most of these improvements are permanent in nature, and set us up well to capitalize on market recovery.

As Peter mentioned during the quarter, we saw continued demand growth and a somewhat moderated level of long steel imports into Poland.

The combination of these factors provided CMC the opportunity to achieve improved shipping volumes.

Speaker #3: Turning to slide 17 of the earnings presentation, our Europe steel group reported adjusted EBITDA of $39.1 million for the fourth quarter of 2025, compared to a loss of $3.6 million in the prior year period.

AMC is effective tax rate was 21, 5% in the fourth quarter and 21, 3% for the full year.

Speaker #3: Segment adjusted EBITDA margin of 14.8 percent increased from negative 1.6 percent a year ago. The biggest driver of improved profitability was the receipt of a $31 million CO2 credit, which was the first of two payments that will be received this calendar year as part of the government energy cost reimbursement program in place through 2030.

Looking ahead, we anticipate a full year effective tax rate between four and 8% for fiscal 2026.

As a result of several factors, we do not anticipate paying any significant U S. Federal cash taxes in fiscal 2026 and for much of fiscal 2027.

During fiscal 2026, we will benefit from our 48 C tax credit.

Speaker #3: Excluding this, operational results improved by 11.7 million, driven by higher margins a 17 percent increase in shipment volumes, and ongoing cost management efforts. Similar to recent quarters, the team in Poland continued to drive efficiency gains with success in nearly every major cost category including labor, consumable usage, alloys, and overhead.

Bonus depreciation on our West, Virginia Mill investment as well as accelerated depreciation from the assets acquired and Cmc's acquisition are fully and see them see Pnp, which will significantly increase our free cash flow generation.

Turning to Cmc's fiscal 'twenty six capital spending outlook.

We expect to invest approximately $600 million in total.

Speaker #3: Most of these improvements are permanent in nature and set us up well to capitalize on market recovery. As Peter mentioned, during the quarter we saw continued demand growth and a somewhat moderated levels of long steel imports into Poland.

This amount approximately $350 million is associated with completing the construction of our west Virginia Micro mill as well as a handful of high return growth investments within our <unk> segment.

Speaker #3: The combination of these factors provided CMC the opportunity to achieve improved shipping volumes. CMC's effective tax rate was 21.5% in the fourth quarter and 21.3% for the full year.

This concludes my remarks, and I'll now turn it back to Peter for additional comments on CMC as financial outlook. Thank you Paul We expect consolidated financial results in the first quarter of fiscal 2026 to be generally consistent with those of the fourth quarter.

Speaker #3: Looking ahead, we anticipate a full year effective tax rate between 4 and 8 percent for fiscal 2026. As a result of several factors, we do not anticipate paying any significant U.S.

Finished steel shipments within the North America Steel group are anticipated to follow normal seasonal trends, while our adjusted EBITDA margin is expected to increase sequentially on higher steel product margins over scrap.

Speaker #3: federal cash taxes in fiscal 2026, and for much of fiscal 2027. During fiscal 2026, we will benefit from our 48C tax credit, bonus depreciation on our West Virginia mill investment, as well as accelerated depreciation from the assets acquired in CMC's acquisition of Foley and CP&P, which will significantly increase our free cash flow generation.

While we expect financial results in the emerging businesses group to decline on a sequential basis due to normal seasonality, we believe they will improve year over year.

Our Europe steel group will receive the second tranche of the annual <unk> credit in an amount of approximately $15 million during the first quarter. Excluding this credit adjusted EBITDA for our Europe still group is likely to be around breakeven as seasonal factors and scheduled maintenance.

Speaker #3: Turning to CMC's fiscal 2026 capital spending outlook, we expect to invest approximately $600 million in total. Of this amount, approximately $350 million is associated with completing the construction of our West Virginia micro mill, as well as a handful of high-return growth investments within our EBG segment.

Outages weigh on profitability.

I am confident in Cmc's long term outlook and continue to believe in our ability to generate significant value for our shareholders. We are executing on several strategic initiatives, which we believe will deliver meaningful and sustained enhancements to our margins earnings cash flow and <unk>.

Speaker #3: This concludes my remarks, and I'll now turn it back to Peter for additional comments on CMC's financial outlook.

On capital, we will achieve this by leveraging our tag operational and commercial excellence program to get more out of our existing enterprise.

Speaker #1: Thank you, Paul. We expect consolidated financial results in the first quarter of fiscal 2026 to be generally consistent with those of the fourth quarter.

Pleading value accretive organic projects and adding complementary early stage construction solutions that provide attractive new growth lanes taken together. We believe these efforts will position our company to take full advantage of the powerful structural trends.

Speaker #1: Finished steel shipments within the North America Steel Group are anticipated to follow normal seasonal trends, while our adjusted EBITDA margin is expected to increase sequentially on higher steel product margins over scrap.

And the domestic construction market for years to come.

Speaker #1: While we expect financial results in the emerging businesses group to decline on a sequential basis due to normal seasonality, we believe they will improve year over year.

I'd like to conclude by thanking our customers for their trust and confidence in CMC and all of our employees for delivering yet another quarter of very solid safety and operational performance.

Speaker #1: Our Europe steel group will receive the second tranche of the annual CO2 credit in an amount of approximately $15 million during the first quarter.

Thank you.

And at this time, we will now open the call to questions to ask a question you May Press Star then one on your telephone keypad.

Speaker #1: Excluding this credit, adjusted EBITDA for our Europe steel group is likely to be around break-even as seasonal factors and scheduled maintenance outages weigh on profitability.

If you are using a speakerphone 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 please limit yourself to one question and one follow up at this time, we will pause momentarily to assemble our roster.

Speaker #1: I am confident in CMC's long-term outlook and continue to believe in our ability to generate significant value for our shareholders. We are executing on several strategic initiatives which we believe will deliver meaningful and sustained enhancements to our margins, earnings, cash flow, and return on capital.

And your first question today will come from Mike Harris with Goldman Sachs. Please go ahead.

Hi, Good morning. This is Julia hang on for Mike Harris, You mentioned strong growth in the construction industry. So I was wondering how much of that demand is coming from infrastructure residential industrial and energy.

Speaker #1: We will achieve this by leveraging our TAG operational and commercial excellence program to get more out of our existing enterprise. Completing value-accretive organic projects and adding complementary early-stage construction solutions that provide attractive new growth lanes.

Yeah. Thank you very much for the questions Cecilia.

Infrastructure has been very strong and has been for the past several years really on the back of the eye JA and we expect it's going to continue to be strong.

Speaker #1: Taken together, we believe these efforts will position our company to take full advantage of the powerful structural trends in the domestic construction market for years to come.

And I would say that we expect there to be a follow on bill so that it should be a multi year trend of nonresidential construction, it's been a bit mixed there have been certain areas that are very strong.

Speaker #1: I would like to conclude by thanking our customers for their trust and confidence in CMC, and all of our employees for delivering yet another quarter of very solid safety and operational performance.

Areas like energy is your site that's been very strong data centers, obviously very strong institutional spending on hospitals that type of thing has been also very strong. But then there has been other areas that are kind of weaker and I'm thinking about you know kind of commercial buildings retail has been weaker the thing.

Speaker #2: Thank you.

Speaker #1: And at this

Speaker #1: Time, we will now open the call to questions. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pickup your handset before pressing the keys.

What's exciting about the nonresidential space is that there is a back a huge backlog of potential projects coming down the pike and I'm thinking about and we've said this before.

Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please limit yourself to one question and one follow-up.

There are something like two trillion dollars of potential projects that are out there that have been announced and then there's still a huge pipeline of potential projects that come behind that and some of these trade deals if and when they get negotiated so so we're very bullish about a turn in nonresidential.

Speaker #1: At this time, we will pause momentarily to assemble our roster. And your first question today will come from Mike Harris with Goldman Sachs. Please go ahead.

Speaker #4: Hi, good morning. Is this Celia Tang on for Mike Harris? You mentioned strong growth in the construction industry, so I was wondering how much of that demand is coming from infrastructure, residential, industrial, and energy?

Spending in and we'll see that move from kind of what's been a flattish to something that's growing again.

And then lastly residential markets residential markets have been a lackluster I would say in a lot of that is tied to.

Speaker #1: Yeah, thank you very much for the question, Celia. Infrastructure has been very strong. It has been for the past several years, really, on the back of the IIJA.

Interest rates those markets tend to be more sensitive to interest rates.

But as we see interest rates start to come down we are we have confidence that we're going to see a turn in that market.

Speaker #1: And we expect it's going to continue to be strong. And I would say that we expect there to be a follow-on bill, so that this should be a multi-year trend.

And remember that we have a deficit of two to 4 million homes in this country. So there's a there's absolutely a dimmed.

Speaker #1: On non-residential construction, it’s been a bit mixed. There have been certain areas that are very strong. Areas like energy, as you cite, that’s been very strong.

Demand backdrop that warrants the residential spending and we just have to get to a place where the.

Speaker #1: Data centers obviously very strong. institutional spending on hospitals that type of thing has been also very strong. but then there's been other areas that are, are kind of weaker, and I'm thinking about, you know, kind of commercial buildings, retail has been weaker.

Economic support the support that but we think we're going to see that as a as rates continue to drift down so in total.

We are we remain very bullish about the level of spending over the next several years each of these sectors.

Speaker #1: The thing that's exciting about the non-residential space is that there is a huge backlog of potential projects coming down the pike. And I'm thinking about, and we've said this before, there are something like $2 trillion of potential projects that are out there that have been announced.

The year trend.

Thank you that's very helpful.

And I was wondering given the bullish outlook why is it that the first quarter outlook is not more positive, especially given the positive performance in the current quarter.

Failure that you know there's a there's a few moving pieces to our outlook for the first quarter, you're correct as far as North America Steel group is concerned.

Speaker #1: And then there's still a huge pipeline of potential projects that come behind that. In some of these trade deals, if and when they get negotiated.

Speaker #1: So, so we're very bullish about a, a turn in non-residential spending and, and we'll see that move from, you know, kind of what's been, flattish to something that's growing again.

Gonna have a very strong quarter in the first quarter.

We often measure the north American steel group as they EBITDA per ton and it was great to see in the fourth quarter that the EBITDA per ton of that segment was over $200 a ton.

Speaker #1: And then lastly, residential markets, you know, residential markets have been, lackluster I would say. And a lot of that is tied to, interest rates.

Speaker #1: Those markets tend to be more sensitive to interest rates. but as we see interest rates start to come down, we, we have confidence that we're going to see a turn in that market.

And as we said in our stated remarks that we exited the quarter with a metal margin over $30 a ton higher than the than the average for the quarter. So North America Steel group will have a great quarter.

Speaker #1: and remember that, we have a deficit of two to four million homes in this country. So there's a, there's absolutely a, a, a demand backdrop that warrants the, the residential spending.

However, if we look at our Europe steel group two aspects to that to that we talked about the reduction in the C. O. Two credits, we will get another credit in the first quarter, but it will be roughly half of what we received in the fourth quarter. So that'll be a $58 million impact and then we have our typical sees.

Speaker #1: And we just have to get to a place where the economic support, the support that we think we're going to see, is as rates continue to drift down.

Speaker #1: So, you know, in total, we are, we remain very bullish about the level of spending, over the next several years. Each of these sectors is, it's a multi-year trend.

Planned maintenance outage that will.

Reduce the operating performance, excluding the C O two credits to get near breakeven.

Speaker #4: Thank you, that's very helpful. I was wondering, given the bullish outlook, why is it that the first quarter outlook is not more positive, especially given the positive performance in the current quarter?

And the other pieces within the BG group.

Because tensor means a significant portion to that business and it's really involved and site prep.

The seasonality of that business is quite a bit more significant than our other businesses. So as we guided towards.

Speaker #1: Yeah, Celia, you know,

Speaker #3: there's a, there's a few moving, pieces to our outlook for the first quarter. You're correct. As far as North America Steel Group is concerned, we're going to have a very strong, quarter in the first quarter.

Improvement over last year, but at a.

A similar type of a transition from fourth quarter to the first quarter and that's those are the major factors, which.

Speaker #3: You know, we often measure the North American Steel Group as EBITDA per ton, and it was great to see in the fourth quarter that the EBITDA per ton of that segment was over $200 a ton.

Drive us towards a fairly consistent overall quarter over quarter, but many different moving pieces within the portfolio.

That makes sense. Thank you.

Thank you for that.

Speaker #3: And as we said in our stated remarks, we exited the quarter with a metal margin over $30 a ton higher than the average for the quarter.

And your next question today will come from Statistics <unk> with Bank of America. Please go ahead.

Hum.

Yeah, Hi, good morning Britain, but congrats on a strong quarter and the unknowns that equation.

Speaker #3: So, North America Steel Group will have a great quarter. However, if we look at our Europe Steel Group, there are two aspects to consider. We talked about the reduction in the CO2 credits.

Oh visit.

Oh, it fully and begin be no I mean, I think you'll know how strong scale in the precast concrete market.

Speaker #3: We will get another credit in the first quarter, but it will be roughly half of what we received in the fourth quarter, so that'll be a $15 million impact.

With this kind of size do you think the focus over the next couple of years, maybe you could just indeed.

And then use that or.

Given the fragmented market would you continue to look for additional inorganic growth opportunities.

Speaker #3: And then we have our typical seasonal planned maintenance outage that will reduce the operating performance, excluding the CO2 credits, to near break-even. And the other piece is within the EBG group, because tensile means a significant portion to that business and it's really involved in site prep, the seasonality of that business is quite a bit more significant than our other businesses.

Yeah. So that's a great question so thank.

Thank you very much the as we kind of look forward with these two transactions I'd say, it's fair to say we are done for now we have a we we have quite a bit of integration to do with these transactions.

And we're very happy with the platform that we built.

As we look a little bit further forward once we bring our leverage down to into our acceptable range. Then we would start to look at other transactions we think.

Speaker #3: So, as we guided towards, improvement over last year, but it, you know, a, a similar type of, transition from fourth quarter to first quarter, that's, those are the major factors which, drive us towards a fairly consistent overall quarter-over-quarter, but many different moving pieces within the portfolio.

This is a big market.

Now again precast overall as we said on the last call. When we introduced <unk>. This is a $30 billion market and it's fragmented and we think theyre going to likely be opportunities for us over time bolt ons will be super attractive because they typically are cheaper they come with synergies and.

Speaker #4: That makes sense, thank you.

Speaker #1: Thank you, Celia.

Speaker #2: And your next question today will come from Satish Kathanasan with Bank of America. Please go ahead.

They are there are they they strengthen our core which is kind of part of the message that we are consistently trying to reinforce.

Speaker #5: Yeah, hi, good morning, Peter and Paul. Congrats on a strong quarter and the announced acquisition. Thank you, with Foley and CP&P. No, I mean, I think you now have a strong scale in the precast concrete market.

And and bigger transactions will likely be more episodic, but our goal for this platform is ultimately to create one of our national scale, but that.

Speaker #5: With this kind of size, do you think the focus over the next couple of years will be to just integrate the assets and reduce debt? Or, given the fragmented market, would you continue to look for additional inorganic growth opportunities?

It looks a little bit like our rebar business again.

To do that we were going to build a platform that several hundred million dollars of EBITDA, but we're going to do it in a measured based on a measured basis and remember.

Speaker #1: Yeah, so that's a great question. Thank you very much. As we kind of look forward with these two transactions, I'd say it's fair to say we are done for now.

We've always said from the beginning we're gonna be super disciplined about M&A.

And making sure that we deliver the returns on the M&A that we do.

Integrating these assets successfully is absolutely critical to ensuring the successful back going forward. So very excited about the opportunity in these two businesses could not fit together better so any way super excited about what we have so far.

Speaker #1: We have, you know, quite a bit of integration to do with these transactions, and we're very happy with the platform that we've built.

Speaker #1: As we look a little further forward, once we bring our leverage down into our acceptable range, then we would start to look at other transactions.

So I would just add you know as we've been talking with the.

Speaker #1: We think, you know, this is a big market. Again, precast overall, as we said on the last call when we introduced CP&P, this is a $30 billion market.

The investment community probably for two years, we've been looking at the early stage construction and really honing in on the precast market and the one thing that came up repeatedly was the these are the two leaders in the in the space and so obviously we don't.

Speaker #1: And it's fragmented, and we think there are likely going to be opportunities for us over time. Bolt-ons will be super attractive because they typically are cheaper, they come with synergies, and they strengthen our core, which is kind of part of the message that we are consistently trying to reinforce.

Dictate timing of when the assets become available, but when they became available. It was imperative that we took a look and and trying to build the portfolio that made sense.

Speaker #1: And, and, and bigger transactions will likely be more episodic, but our goal for this platform is ultimately to create one of national scale that looks a little bit like our rebar business.

Yes, that's good.

Good to go.

Just on fully.

It is clear that the margin profile is one of the best today, but can you maybe shed the historical growth rate portfolio over the past two years and looking at <unk> digital business to continue to gain market share.

Speaker #1: Again, and that's to do that, we're, we're going to build a platform that's several hundred million dollars of, of EBITDA, but we're going to do it in a measured base, on a measured basis and remember, you know, we've always said from the beginning we're going to be super disciplined about M&A, and making sure that we deliver the returns on the M&A that we do.

And go about the 5% to 7% market growth.

Yeah I think.

If you look at the growth over the business over the last couple of years.

Speaker #1: and integrating these assets successfully is absolutely critical to ensuring the success of that going forward. So, I am very excited about the opportunity, and these two businesses could not fit together better.

We should assume theres a base level of growth, it's a kind of a GDP related and then on top of that there's growth related to kind of share expansions that that the business is or the business mix.

Speaker #1: So, anyway, I'm super excited about what we have so far.

And in the case of Foley.

Has a number of expansions, but it's in progress.

Speaker #3: Satish, I would just add, you know, as we've been talking with the investment community, probably for two years, we've been looking at the early-stage construction and really honing in on this precast market.

In in its territory today that are in its territories today.

Will provide opportunities for future growth. So we would expect to grow at a level in excess of GDP over the next couple of years from a volume standpoint.

Speaker #3: And the one thing that, that came up repeatedly was the, these are the two leaders in the, in the space, and so obviously we don't dictate timing of when the assets become available, but when they became available, it was imperative that we, took a look and, and, and, tried to build the portfolio that, made sense.

And I would just add to teach the margin level that we describe in the material.

That business has generated that consistently over the last handful of years, so very consistent performer.

Okay. Thank you I'll jump back in queue. Thank you.

Speaker #5: Yeah, that, that's great to hear. just on Foley, it is clear like the, that the margin profile is one of the best today, but can you, can you maybe share the historical growth rate for Foley like over the past two, three years?

And your next question today will come from Alex hacking with Citi. Please go ahead.

Okay.

Yes, thanks, good morning, and congrats on the deal I guess just following up on the margin question Foleys margins looked like you're almost double C. P. M P.

Speaker #5: And, looking ahead, do you see potential for this business to continue to grow, gain market share, and grow above the five to seven percent market growth?

Could you maybe give a little more color on kind of what's driving that and is there a potential opportunity to increase margins at sea Pnp from from.

From learning from Foley. Thanks.

Speaker #1: Yeah, I think, you know, if you look at the growth over the, of the business over the last couple of years, I think we should assume there's a base level of growth that's, kind of GDP related.

Yeah.

Thanks, Alex I appreciate the question. So a couple of things that I would point to.

And again I think as we look at these businesses, we one of the things we really like about this.

Speaker #1: And then on top of that, there's growth related to, kind of share expansions that, that the businesses are, that the business makes. and in the case of Foley, it has a number of, expansions that it's in progress on.

As Paul said, we spent a lot of time looking at these businesses is that they both bring strengths to the table.

There are certain things that fully does really well and there are certain things that <unk> does really well and I think the combination of those two companies is going to build a really formidable company for in our in our portfolio.

Speaker #1: in, in its territory today that, or in its territories today, that will provide opportunities for future growth. So, we would expect to, grow at a level in excess of GDP over the next couple of years from a volume standpoint.

If we look at fully specifically relative to <unk> and try to articulate the margin differentials are.

Speaker #3: And I would just add, Satish, the margin level that we describe in the material, the business has generated that consistently over the last handful of years.

One of the things fully has a different operating model than C. P. M. P and so that that's a factor and the other thing that I would say on the C. P. M. P side is that <unk> has made a number of acquisitions recently.

Speaker #3: So, very consistent performer.

Or are they all kind of works in progress and process and so are works in progress and so as a consequence the margins in some of those businesses are lower and they bring down the overall margin. So if you look at pre cast in general It is the case at Foley's margins stand out.

Speaker #5: Okay, thank you. I'll jump back in queue. Thank you.

Speaker #2: And your next question today will come from Alex Hacking with Citi. Please go ahead.

Speaker #6: Yeah, thanks. Morning. And congrats on the deal. I guess just following up on the margin question, you know, Foley's margins look like they're almost double CP&P.

But <unk> does.

Look at the plants that are you know kind of the more mature plants, they have very attractive margins there as well.

Speaker #6: Could you maybe give a little more color on what's driving that? Is there a potential opportunity to increase margins at CP&P from learning from Foley?

Okay. Thanks for the color and then just following up I guess on the cash conversion side.

Speaker #6: Thanks.

The 600 million Capex next year estimate how much of that would be for precast and within that how much would be kind of sustaining versus growth. Thank you.

Speaker #1: Yeah, that's, thanks, Alex. I appreciate the question. So, a couple of things that I would point to. And again, I think as we look at these businesses, one of the things we really like about this is we've, and as Paul said, we spent a lot of time looking at these businesses.

Yeah, well for precast, it's the maintenance Capex on these businesses. It is much lower we talked about in.

Speaker #1: Is that they both bring strengths to the table. There are certain things that Foley does really well and there are certain things that CP&P does really well.

In the case of C. P. M. P. You may remember, we talked about eight to 10 million of maintenance Capex in the case of Foley, it's probably like a kind of 10 to 15 type of number in.

Speaker #1: And I think the combination of those two companies is going to build a really a formidable company for, in, in our, in our portfolio.

In the case of C. P. M. P for the reason that I just explained to you they've got these businesses that they've acquired where there's some investment that we think we can support.

Speaker #1: If we look at Foley specifically relative to CP&P and try to articulate the margin differentials, one of the things Foley has is a different operating model than CP&P, and so that's a factor.

Their spending is probably going to be a little bit higher over the first couple of years of our ownership as we kind of bring together the investments that they've made and again those are all all of that capex beyond maintenance is maintenance.

Speaker #1: And the other thing that I would say on the CP&P side is that CP&P has made a number of acquisitions recently, where they are kind of works in process, in process.

Spending that has very attractive returns tied to it.

Speaker #1: And so, or works in progress. And so, as a consequence, the margins in some of those businesses are lower and they bring down the overall margin.

The only thing Alex I would add is theaters talking about annual numbers and as we've talked about really are we expect the transaction to close in by the end of the calendar year. So the numbers in our fiscal will be a lot lower than those.

Speaker #1: So, you know, if you look at precast in general, it is the case that Foley's margins stand out. But CP&P does, if you look at the plants that are, you know, kind of the more mature plants, they have very attractive margins there as well.

Hi, Thanks for the clarification.

Thank you.

Pardon me and your next question today will come from Carlos de Alba with Morgan Stanley. Please go ahead.

Speaker #6: Okay, thanks for the color. And then just following up, I guess on the cash conversion side, you know, if the $600 million CapEx next year estimate, how much of that would be for precast and within that, how much would be kind of sustaining versus growth?

Yes. Thank you very much good morning.

A follow up on the prior question.

Uh huh.

How quickly do you think the margins are in CPP.

Speaker #6: Thank you.

Equally in those recent acquisitions could bring.

Speaker #1: Yeah, there's, well, for precast, the maintenance CapEx on these businesses is much lower. We talked about, in the case of CP&P, you may remember we discussed $8 million to $10 million of maintenance CapEx.

Bring to the.

<unk> come to the levels that the fawley and maybe the core CBP business is already.

Yeah.

Speaker #1: In the case of Foley, it's probably like a, you know, kind of 10 to 15 type of number. In the case of CP&P, for the reasons that I just explained to you, they've got these businesses that they've acquired where there's some investment that we think we can support. Their spending is probably going to be a little bit higher.

Yes, it's a great Q2, yes.

Great question Carlos So the one thing I'd say is you know we wanted to be a little careful we don't own these businesses, yet so we need to.

Close on the transactions and better understand what we have and with that understanding will come more clarity on that.

Speaker #1: Over the first couple of years of our ownership as we, kind of bring together the investments that they've made. And again, those are all, all of that, CapEx beyond maintenance is maintenance or is spending that has very attractive returns tied to it.

<unk> frame, but.

I think the appropriate way to frame. It for you at this juncture is that we talk about the synergies being.

Being achievable over a three to five year horizon, and I think that that's the right horizon to think about for.

Speaker #3: The only thing Alex I'd add is, is Peter's talking about annual numbers and, you know, as we talked about really, we expect the transaction to close in by the end of the calendar year.

Any kind of improvement in the C. P. M. P margins. Obviously, there are some things that will be that'll come quick and then theres other things that will take longer I just mentioned before in response to Allison's question that we're going to put some extra capital into in the tune to the tune of kind of five ish million dollars.

Speaker #3: So, the numbers in our fiscal year will be a lot lower than those.

Speaker #1: Yeah.

Speaker #6: thanks for the clarification.

Speaker #1: Thank you.

Speaker #2: Pardon me. And your next question today will come from Carlos De Alba with Morgan Stanley. Please go ahead.

In per year into <unk> and that will be to accelerate some of that and again. That's all you know really high return.

Speaker #6: Yeah, thank you very much. Good morning. and maybe a follow-up on, on, on the prior question. how quickly do you think that the margins, in CP&P like in, in particularly in those, recent acquisitions could, you know, bring to the, bring up or, or come to the levels that, that Foley and, and maybe the, the core CP&P business, is already, experiencing?

Capital that we'll be deploying.

Alright, so the five to 10 million incremental EBITDA in <unk>.

<unk> you mentioned that includes these recent acquisition by the company.

Wrapping up the EBITDA generation right.

No just to be clear so when we announced <unk>, we said that there was $5 million to $10 million in that transaction, we maintain that right and then in this transaction, we're bringing another 25 to 30 over a three to five year period.

Speaker #6: Is it, you know.

Speaker #1: Great Great question.

Speaker #3: Year or two years or?

Speaker #1: A great question, Carlos. So, the one thing I'd say is, you know, we want to be a little careful. We don't own these businesses yet.

Speaker #1: So, we need to kind of close on the transactions and better understand what we have. With that understanding, we'll gain more clarity on the timeframe.

So that's why you'll remember in the last conversation that we had when we acquired or when we acquire announced the acquisition of <unk>. We said that you know as.

As we have a platform we would have more synergies with success of moves and this is a great example of this and honestly.

You might ask the question about the timing of these two transactions and obviously, we couldn't call the timing, but I think when you see that magnitude of synergies that makes it clear why this was the transaction we had to look at seriously.

So it's yeah, it's the extra 25 to 30 in this transaction.

Alright fair enough.

My second question is regarding the outlook for dividends and buybacks and vis vis the cash flow generation of the company with you had mentioned that the acquisitions of both of them are going to be accretive to free cash flow you know what I really pay I don't know if.

Cash taxes in the next two years.

How do you see the dividends and buybacks in the coming quarters.

Yeah. So let me just say to answer your question directly.

On dividends, we will we have no plan to change our dividend zero zero plan to change our dividend and I'd say also our long term capital allocation strategy is not changing at all not at all.

What I would say is that we are done with acquisitions for now and we're going to focus on the big acquisitions for now and we're going to focus on integration and making sure that we make these transactions highly successful and great return investments for <unk>.

<unk>.

We will continue.

The organic growth projects that we've started across the company you know, we as we move past.

POS Virginia, but these will be much more capital light.

Investments, but we will continue those.

And we will slow down our share repurchase program.

And probably bring it to a level, where we're offsetting employee share grants in the short term as we get our leverage back down below the.

The two times target and as we once we get to that two times target or below will then ramp up share repurchases share repurchases are a critical part of our capital allocation strategy and we intend to resume those as our balance sheet comes into line.

In parallel we're very confident and in both the numerator and the denominator in terms of being able to bring that leverage down in terms of the you mentioned the cash flow and the lack of U S cash taxes, though the reduction in capex going forward and the optimism in the current environment and our business.

Is that cash flow generation as is.

Expect it to be very strong and then that also is helping the EBIT.

That we expect the business to generate over the coming periods is also expected to be a strong and therefore, we ship both aspects should help us achieve that two times net leverage over the coming quarters.

Perfect. Thank you.

Thank you Carla.

And your next question today will come from Bill Peterson with Jpmorgan. Please go ahead.

Yes, hi, good morning, Thanks for taking the questions and congrats on the on the second transaction here in a few months.

Along those lines that have a longer term question, maybe getting more suited for a capital market statement.

Given these transactions how would you envision the company looking like in sort of a five plus year timeframe in terms of product mix rebar.

Rebar versus long products.

Stabilization pre cast or other materials.

Given the margin structure in these newer businesses and acquire companies would you consider selling core assets in order to accelerate the transition just trying to get a sense on how we should envision this company over the long term.

In parallel we're very confident and in both the numerator and the denominator in terms of being able to bring that leverage down in terms of the you mentioned the cash flow and the lack of U S cash taxes, though the reduction in capex going forward and the optimism in the current environment in our business.

Yeah, It's a great question.

If you think about the strategy that we've outlined.

It's one of becoming an early stage construction supplier.

And if you think about our rebar business or our fabrication business. These fit perfectly in these are early stage construction suppliers do you think about our 10th of our business. It's early stage construction think about our recently acquired precast platforms early stage construction Prs performance reinforcing steel early.

Is that cash flow generation as is.

Expect it to be very strong and then that also is helping the EBIT.

That we expect the business to generate over the coming periods is also expected to be a strong and therefore, we ship both aspects should help us achieve that two times net leverage over the coming quarters.

Stage construction and construction services same thing. So you know if you look at the portfolio that we have today, we've got a number of interesting assets that we can build on and that's one of the things we find so compelling about the portfolio to become a leader in early stage construction. So you know.

Perfect. Thank you.

Thank you Carla.

And your next question today will come from Bill Peterson with Jpmorgan. Please go ahead.

When we talk about our free.

Yes, hi, good morning, Thanks for taking the questions and congrats on the on the second transaction here in a few months.

Precast business again as I said in response to an earlier question. Our goal is to build that into something where we have a.

Along those lines that have a longer term question, maybe maybe more suited for our capital markets day, but.

National footprint, and that's going to mean kind of several hundred million dollars of.

Given these transactions how would you envision the company looking like in sort of a five plus year timeframe in terms of product mix rebar versus long products.

Of EBITDA with these two transactions were well on the way to doing that and with the footprint that fully brings I think we have a beachhead to examine some of those markets that by the way, we know well because we're already in those markets with our rebar fabrication and our meals business right. So so there's a there.

Ground stabilization free cash or other materials.

Given the margin structure in these newer businesses and acquire companies would you consider selling core assets in order to accelerate the transition just trying to get a sense on how we should envision this company over the long term.

There's a there's a very natural.

Yes, it's a great question.

Path that we're following as we look at our other E. B G businesses, we would love to grow attempts are we think that has great potential and it's still a very underpenetrated market. It could be it will be unimportant piece of our portfolio performance reinforcing steel the plant that we have today is sold out.

If you think about the strategy that we've outlined.

It's one of becoming an early stage construction supplier.

And if you think about our rebar business our fabrication business. These fit perfectly in these are early stage construction suppliers, you think about our 10th of our business. It's early stage construction think about our recently acquired precast platforms early stage construction Prs performance reinforcing steel early stage.

So we're building another one.

And we believe that the demand for a kind of a corrosion resistant steel in this country given some of the changes in weather and so forth is only going to increase.

Construction and construction services same thing. So if you look at the portfolio that we have today, we've got a number of interesting assets that we can build on and that's one of the things we find so compelling about the portfolio to become a leader in early stage construction. So you know when.

And construction services is a tremendous asset we talked to customers and the customers tell us.

Construction services business, where we are and it's really a small segment of our footprint is which is really Texas, Louisiana and Oklahoma.

It's a great asset to the to the customers. We have so that's something that we're looking at as a potential way to.

We talk about our.

Precast business again as I said in response to an earlier question. Our goal is to build that into something where we have a national.

Kind of complement the early stage construction portfolio that we're building so.

Our national footprint, and that's going to mean kind of several hundred million dollars of EBITDA with these two transactions were well on our way to doing that and with the footprint that fully brings I think we have a beachhead to examine some of those markets that by the way, we know well because.

As we as we look at the portfolio again, what we want is we want businesses that can be of scale and that can be of significance to our customers, we want businesses that bring value to our customers.

It's difficult to define the portfolio precisely, but the direction that we're going is we want value added products that have high margins and kind of a.

We're already in those markets without rebar fabrication and our mills business right. So so there's a there's a there's a very natural.

Good returns on invested capital and I want to just come back sorry. This is a long answer but I think this is important I wanted to come back to our our steel business and tag.

Path that we're following as we look at our other E. B G businesses, we would love to grow terms are we think that have great potential in and it's still a very underpenetrated market. It could be it will be an important piece of our portfolio performance reinforcing steel the plant that we have today is sold out.

And the whole mission of tag is to improve the great platform that we already have in steel and it is so critical when we talk to the customers and I'm talking about big contractors. They tell US you guys are your franchise in the steel market is.

So we're building another one.

We believe that the demand for our kind of our corrosion resistant steel in this country given some of the changes in weather and so forth is only going to increase.

Tremendously valuable to us because you do what you say you're going to do when you do it when you say youre going to do it and tag is helping us make that business, even better and our goal with that business is to raise the margins through the cycle.

And construction services is a tremendous asset that we talk to customers and the customers tell us.

Construction services business, where we are and it's really a small segment of our footprint is which is really Texas, Louisiana and Oklahoma.

So that they start to look like the margins in some of our kind of ultimately some of our <unk> businesses. So again. This is a it's a multiyear journey, but we think we have a lot of opportunity and the team that's executing the tag program within our company is doing a phenomenal job. So.

It's a great asset to the to the customers. We have so that's something that we're looking at as a potential way to kind.

Kind of complement the early stage construction portfolio that we're building so.

As we as we look at the portfolio again, what we want is we want businesses that can be of scale and that can be of significance to our customers, we want businesses that bring value to our customers.

Anyway, Bill I know, that's a long answer to your question, but hopefully it gives you some color.

No certainly and thanks for all the details there. My next question is more I guess near term focused.

And you talked about typical seasonality across several of these sectors, but I guess in North America.

So it's difficult to define the portfolio precisely, but the direction that were going is we want value added products that have high margins and kind of a good returns on invested capital and I wanted to just come back sorry. This is a long answer but I think this is important I wanted to come back to R. R.

If you look back this would imply something like a down 3% to 7% quarter on quarter, but we've seen a lot of variability over the last five years or so and I would assume you're really talking more driven by the downstream versus products, but can you unpack what typical seasonality is really meant here.

Steel business and tag.

And the whole mission of tag is to improve the great platform that we already have in steel and it is so critical when we talk to the customers and I'm talking about big contractors they tell us.

Got that.

It looked like for the various subsectors.

<unk> of your business.

Yeah Bill.

The season September through November really it is a good construction season similar to our.

You guys are your franchise in the steel market is tremendously valuable to us because you do what you say you're going to do when you do it when you say youre going to do it and tag is helping us make that business, even better and our goal with that business is to raise the margins through the cycle.

Our fourth quarter with the exception of the week that we lose for Thanksgiving, So really we see.

It's usually that two 3% reduction in our in volumes that we see in the in the first quarter on the North American Steel group as I said in in.

So that they start to look like the margins in some of our you know kind of ultimately some of our <unk> businesses. So again. This is a it's a multiyear journey, but we think we have a lot of opportunity and the team that's executing the tag program within our company is doing a phenomenal job. So.

An earlier answer.

We do see impacts to the other segments a little bit.

Stronger given the more cyclical nature of site preparation, which drives a lot of the <unk> business. So that one is is a little bit more seasonal and as you saw last year, and then Europe with the with the outage at less seasonal but.

Anyway, Bill I know, that's a long answer to your question, but hopefully it gives you some color.

No certainly and thanks for all the details there. My next question is more I guess near term focused.

The outage season.

Yes, thanks for that Paul Thanks for all the details appreciate it.

And you talked about typical seasonality across several of these vectors, but I guess in North America.

Thank you Bill.

And your next question today will come from Andrew Jones with UBS. Please go ahead.

If you look back this would imply something like a down 3% to 7% quarter on quarter, but we've seen a lot of variability over the last five years or so.

So I just wanted to better understand the barriers to entry in this business I mean to me it looks like it's a pretty fragmented business you obviously call out a few things on the slides, including relatively high capital costs. I mean could you give us some idea in terms of.

You're really talking more driven by the downstream versus products, but can you unpack what typical seasonality is really meant here and what that may look like for the various subsectors sub segments of your business.

So quantify those and when you talk about the steep learning curve can.

Yeah.

The season September through November really it is a a good construction season similar to our fourth quarter with the exception of the week that we lose for Thanksgiving, So really we see.

Can you kind of give us some sort of sense as to how complex. This is because I just high level, a fragmented business usually means much lower margin than what I'm, saying in these numbers.

Yeah.

It's usually that two 3% reduction in our in volumes that we see in the in the first.

So again, if we look at what drives this business.

It starts with customer relationships right and if you look across the <unk>.

First quarter on the North American Steel group as I said in.

Portfolio.

<unk> or Foley, they've got great relationships in the region that connect them and obviously a reputation and the capability to service these but the jobs that they're getting and I think obviously.

In an earlier answer.

We do see impacts to the other segments a little bit.

Stronger given the more cyclical nature of site preparation, which drives a lot of the E. B G business. So that one is is a little bit more seasonal and as you saw last year, and then Europe with the with the outage.

Obviously reputation just like in our rebar fabrication, it's critical that you deliver the product on time and that you deliver a good quality products and you help the contractor.

Less seasonal but.

The outage season.

Yes, thanks for that Paul Thanks for all the details appreciate it.

Accelerate their their job. So so those are those are really important and the third leg of this is capability.

Thank you Bill.

And your next question today will come from Andrew Jones with UBS. Please go ahead.

And when you look at the capabilities of both C. P M P and Foley they bring a broad based pre cast capability. So you can be in the precast business.

Hi, John So I just wanted to better understand the barriers to entry in this business.

To me it looks like it's a pretty fragmented business you obviously call out a few things on the slides, including relatively high capital costs. I mean could you give us some idea in terms of housing so quantify those and you know when you talk about the steep learning curve can.

Pretty easily if you kind of have a concrete mixer and end up in the mold but.

Point is is that most of these complicated job sites.

They need a lot of different forms to be to serve the pre counts need and so as a consequence.

Can you kind of give us some sort of sense as to how complex. This is because I just high level, a fragmented business usually means much lower margin than what I'm, saying and these numbers. Thanks.

The capability that the both of these companies have across.

Yeah.

Yeah.

Concrete pipe and precast fronts gives them a differentiating capability.

So again, if we look at what drives this business.

It starts with customer relationships right and if you look across the portfolio.

Perform in the market on these complicated jobs and the last thing I would say is and this goes to the speed point.

C P M P or Foley, they've got great relationships in the region.

Is that having some scale helps a lot on these larger jobs because again, what the contractors will tell you is when they start a project they want to go fast.

That connect them and obviously a reputation and the capability to to service these but the jobs that they're getting and I think obviously.

And so they don't want to wait for material and the party that can have the material available has a real advantage.

Obviously reputation just like in our rebar fabrication, it's critical that you deliver the product on time and that you deliver a good quality products and that you help the contractor.

In supplying the product.

Thank you Jos.

Yeah.

Thanks, very much so can use.

Accelerate their their job. So so those are those are really important and the third leg of our business capability.

Andrew can you start over because we we lost a follow on.

Oh no no.

No no no that's clear thank you.

And when you look at the capabilities of both C. P M P and Foley they bring a broad based pre cast capability. So you can be in the precast business.

Recovery.

And your next question today will come from pardon me and your next question will come from Ketchup Cenk with BMO capital markets. Please go ahead.

Hi, Thank you for taking my question, maybe just quickly Peter did you say earlier on in the call that you would like to grow the precast business to 700 million in EBITDA did I hear that correctly.

Pretty easily if you kind of have a concrete mixer and and and a mold, but you know the point is is that most of these complicated job sites. They need a lot of different forms to be to serve the precast need and so as a consequence.

No no it's several several hundred million dollars.

Several hundred million dollars and so sorry go ahead.

The capability that the both of these companies have across.

No no you go sorry.

Concrete pipe.

No I was just going to say several hundred million dollars and again between these two acquisitions were already at $250 million.

And precast fronts gives them a differentiating capability.

Perform in the market on these complicated jobs and the last thing I would say is and this goes to the speed point.

So we we're we've got a good start.

And I think even before what the Friday.

Is that having some scale helps a lot on these larger jobs because again, what the contractors will tell you is when they start a project they want to go fast.

And that's one of the first acquisition the commentary was that most of this the growth there is more likely to M&A is that correct.

It is it is I mean again, there are organic projects and I noted two of them.

And so they don't want to wait for material and the party that can have the material available has a real advantage.

Earlier in this call Foley platform and there's a number of organic growth projects and the <unk> platform, but again to build scale and the scale that we're talking about doing as I said in the last call, it's likely going to involve M&A.

In supplying the product.

Okay.

Thank you.

Yeah.

Thanks, very much so can use.

Andrew can you start over because we are we lost about a follow on.

The good news is that now as I said, we have a we have a real platform that we can build around so bolt on acquisitions that come with lots of synergies will be very appealing.

Oh no no.

No no no that's clear thank you.

Recovery.

And your next question today will come from pardon me and your next question will come from Ketchup Jenkin with BMO capital markets. Please go ahead.

And then when they come around some of these.

Hi, Thank you for taking my question, maybe just quickly Peter did you say earlier on in the call that you would like to grow the precast business to 700 million in EBITDA did I hear that correctly.

A larger acquisitions, which are.

Not gonna be every single day, but when they come around will be in a position to look at those as well.

Yes, just to supplement that catch you know I would say the step change comes from inorganic growth I think as we look at the trends in these businesses we.

No no several several hundred million dollars.

Several hundred million dollars and so sorry go ahead.

We see above average growth.

Sure the adoption and penetration of precast product.

No no you go sorry.

It really solve a labor shortage issue they solve storm water management issues and that has been what really has driven some good size growth and if we look at the regions in which these businesses operate the growth expectation of construction activity in it.

No I was just going to say several hundred million dollars and again between these two acquisitions were already at $250 million.

So we we're we've got a good start.

And I think even before the fire.

The announcement of the first acquisition the commentary was that most of this the growth there is more likely to M&A is that correct.

In their geographies is expected to be very attractive over the coming years.

It is it is I mean again, there are organic projects and I noted two of them.

Perfect. Thank you so much.

Thank you Katja.

And your next question today will come from Phil Gibbs with Keybanc capital markets. Please go ahead.

Earlier in this call on the Foley platform and there's a number of organic growth projects and the <unk> platform, but again to build scale and the scale that we're talking about doing as I said in the last call, it's likely going to involve M&A.

Hey, good morning.

Hey, Bill.

A question about the Capex guidance for this year around $600 million does that include a cap.

Capex related to the businesses that you're poised.

The good news is that now as I said, we have a we have a real platform that we can build around so bolt on acquisitions that come with lots of synergies will be very appealing.

Poised to close on and if not what's the what's the typical maintenance level of capex associated with those those businesses.

And then when they come around some of these are the larger acquisitions, which are.

Yeah. It does not it does not that's a CMC capex number but a failure.

Bill you may have heard us say in response to an earlier question the maintenance Capex for these businesses, it's probably eight to 10 for <unk> and probably 10 to 15 four.

Not going to be every single day, but when they come around will be in a position to look at those as well.

Just just to supplement that catch up you know I would say the step change comes from inorganic growth I think as we look at the trends in these businesses.

Foley, so theyre not theyre not big Capex numbers.

We see above average growth.

That's a percentage of their revenues.

Sure the adoption and penetration of precast product.

No that's a million dollars.

Really solve a labor shortage issue they solve storm water management issues and that has been what really has driven some good size growth and if we look at the regions in which these businesses operate that growth expectation of construction activity in it.

Oh, Okay, yeah. So it's generally.

3% to 4% revenue and in this pre cast our spaces is the maintenance capex in a very generic number but that's it it's a very capital light.

Okay.

And as you.

In their geographies is expected to be very attractive over the coming years.

Really.

Pivoted in an accelerated the strategy to acquire some of these more upstream oriented.

Perfect. Thank you so much.

Thank you Jim.

Construction facing businesses in the United States, particularly in the southeast and mid Atlantic.

And your next question today will come from Phil Gibbs with Keybanc capital markets. Please go ahead.

Do you think that do you think that that means that there should be a more natural buyer, perhaps for for your European assets.

Hey, good morning.

Hey, Bill.

A question about the Capex guidance for this year around $600 million does that include a cap.

Assets.

Yes.

Capex related to the businesses that you're poised.

Well.

So.

Again from a when we look at our European assets I think I've said this in the past, we really really appreciate those assets for what they bring to the CMC family and I would just point to the tag.

Poised to close on and if not what's the what's the typical maintenance level of capex associated with those those businesses.

Yes, it does not it does not that's a CMC capex number but a.

Kind of initiative that I mentioned earlier on the call.

Bill you may have heard us say in response to an earlier question the maintenance Capex for these businesses, it's probably eight to 10 for <unk> and probably 10 to 15 four.

The team in Europe has done just a phenomenal job on being low cost and Theres a lot that we can extrapolate.

From from what they've done to help us in North America, and one of the things that our team in North America is absolutely dead set on is that we will be a low cost producer in our steel business in North America.

Foley, so they're not they're not big Capex numbers.

That is a percentage of their revenues.

No that's a million dollars.

So the Polish business brings a lot to the table.

Oh, Okay, yeah. So it's generally.

3% to 4% revenue and in this pre cast our spaces is the maintenance Capex is a very generic number but that's it's a very capital light.

It's absolutely a core part of our portfolio.

Thank you.

Thank you Bill.

Okay.

At this time there appears to be no further questions. Mr. <unk> I'll turn the call back over to you.

And as you.

Really.

Pivoted in an accelerated the strategy to acquire some of these more upstream oriented.

Thank you very much 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 accretive growth opportunities, including.

Construction facing businesses in the United States, particularly in the southeast and mid Atlantic.

Do you think that do you think that that means that there should be a more natural buyer perhaps.

Or for your European assets.

Recently announced pre cast acquisitions create an exciting future for our company.

Assets.

Yes.

Well.

You for joining us on today's conference call. We look forward to speaking with many of you.

So.

Again from a when we look at our European assets I think I've said this in the past, we really really appreciate those assets for what they bring to the CMC family and I would just point to the tag kind of initiative that I mentioned earlier on the call.

During our investor calls in the coming days and weeks. Thank you very much everybody.

Concludes today's CMC conference call you may now disconnect.

The team in Europe has done just a phenomenal job on being low cost and Theres a lot that we can extrapolate.

From from what they've done to help us in North America, and one of the things that our team in North America is absolutely dead set on is that we will be a low cost producer in our steel business in North America.

So the Polish business brings a lot to the table.

It's absolutely a core part of our portfolio.

Thank you.

Thank you Phil.

At this time there appears to be no further questions Mr. Matt I'll turn the call back over to you.

Thank you very much 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 accretive growth opportunities, including.

Recently announced pre count the acquisitions create an exciting future for our company.

You for joining us on today's conference call. We look forward to speaking with many of you.

During our investor calls in the coming days and weeks. Thank you very much everybody.

Concludes today's CMC conference call you may now disconnect.