Commercial Metals (CMC) 9 Jan 232023 Q1 Earnings call transcript

Hello, and welcome, everyone, to the First Quarter Fiscal 2023 Earnings Call for Commercial Metals Company. Today's material, including the press release and supplemental slides that accompanies today's call can be found on the CMC Investors Relations website. Today's call is being recorded. [Operator Instructions] I would like to remind all participants that during the course of this conference call that the company may make statements that provide information other than historical information that will include expectations regarding the economic conditions, effects of legislation, U.S. steel import levels, U.S. company's finished facilities, the the financial the for of for benefits capabilities time measures demand company's execution new the of company's the and activity, capital steel of expected products, and line future spending. construction results plan, operations, growth future operations,

and expectations. and materially cause are statements and risks that subject These including the These conditions looking XX-K. Form and are company's statement similar latest current subject and from actual assumptions and to the beliefs factors certain uncertainties the that are statements involve other in section the could results certain to annual risks differ Exchange described to report and with the these forward that including company's filings company's uncertainties, on are on the of considered forward-looking may those speculation Risk reflect and based Securities Commission,

on offers prove these expectations All statements current and of are these statements be made correct, CMC to or based expectations may and except actual only beliefs, vary Although date, results that materially. management's beliefs assurance this no will in as in with information CMC required assume statements not obligation future update, or otherwise. unanticipated circumstances by or amend of these clarify events, does to changes anticipated occurrence assumptions, or new the any or law. connection events,

now to and Commercial of Executive remarks the quarter. fiscal the the or Board, Ms. call end fiscal supplemental presentation for or can of and be all year references numbers over slides, to And such found are Chairman year or stated, made turn the the presented introductions, Officer numbers reconciliations Company, Smith. Unless to would company's I to financial for be Barbara the will opening like earnings the and Metals Some references Chief President company's quarter otherwise release, measures non-GAAP in now website. on company's

had of I season. a Conference Good and CMC's first Earnings quarter each joining everyone, hope morning, for you Call. wonderful thank you holiday

period, second issued first in core like the made history. performance marking CMC's who EBITDA morning, As we XX,XXX employees would another fiscal release company's our XXXX's results press best possible. I reported thank to our this outstanding quarter was these in

and CMC's the are and are Your success. appreciated hard behind force driving efforts focused work

then the Paul today's outlook start Lawrence will update comments quarter, then quarter's market growth financial in and discuss quarter questions. will will current call providing with for second information after cover I CMC's on before investments first the an few key call conclude to more on sustainability a our our efforts environment. performance, and open will the we detail, the fiscal with I which strategic

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

in among strongest our share net As earnings I XXX-year quarter of net XXXX or We sales fiscal noted, were billion. the achieved $X.X first company's per earnings diluted on of million history. $XXX.X CMC's $X.XX

Excluding operations of the adjusted $X.XX share. at Arizona mill continuing project, operational million earnings from per our diluted or costs incurred were start-up X $XXX.X impact

an increase million, XX% return ago, capital produced annualized Results EBITDA CMC which of XX%. an XXXX of on $XXX exceptional of North generated again invested its our Segment a the for capitalized EBITDA were of segment team core within for land was excluding California strong sale. from quarter second of demand. quarter year our our adjusted America as impact X% the record, on

sales experience growth. downstream the on of to year-over-year strong products which margins continued We during meaningful drove quarter, and earnings steel

its within Poland the well excellent profitably generating our CMC that challenging well-publicized adjusted a segment leveraged than win team to whole, Reflecting crisis, ongoing of headwinds cost economic the strong and their XX and volume performing backdrop, performed well market EBITDA despite past maintain tailwinds are Europe in double X both we North segments economic in on encountered more demonstrated Facing with with the quarter years' a quarterly and Europe Our as in average. associated sharply environments. structure capable levels. headwinds environments share America different in energy

and to exciting when fully ability strategic strategies investments, model would well-aligned adjust on available discuss provided projects. have to us adapt when are mill specifically business challenges they quickly Our like the opportunities now arise. or I and growth capitalize our CMC's greenfield

later X Our a for spring. start-up is Arizona mill this on track micro project

as build the quarter As equipment. begin I our costs and incurred the mentioned we and new crews during to previously, start-up we commission first train

the to unique is bar of excited steelmaking are Once will X anywhere process CMC and in will world. merchant be Not up, industry first of producing have we our We commissioning mill, AZ begin mills micro operating to complexes as unique ramped evolves. updates on one most providing forward in by another look but only the a configuration. the will also micro co-located a achieve X we

shared including improved this production site of expect optimization, X We shared plants and scheduling staff will steel arrangement production provide infrastructure. support, synergies, the

and production of merchant an annual products construction basis. initially produce X/X be rate commissioning X's merchant the commissioning to to increase Jobs calendar Investment begin on Arizona to Act, well expect ramping public with with the follow mix this to approximately a Currently, of year. we timed later rebar infrastructure run should intend We Infrastructure which and bar X/X's looks soon up after. to rebar focus on

on mentioned seamlessly previously, as to have its Arizona based mix course, adjust X Of will have the market flexibility demand. production we operational

entire dedicated to for member of West I'd site become Governor Jim like the we took within a anticipated, is development and fourth has an CMC the staff Virginia projects. We during manufacturing and supportive and Justice be excellent our in longer thank ongoing The will support their location of community. state in CMC's selection assistance County Virginia. innovation. announced organic that their other an we to Turning Berkeley than that selection chosen early but the confident West that County, December process located micro are mill growth economic team as the Berkeley site important process

be will as been the The growth MMX. producing length and and happy the to deployed will this West first spooled Arizona, phase, our cleanest CMC CMC straight will Steel say is of steelmaking our plant latest mills planning technologies Virginia have making I'm expected as mill site Q-One capacity initiative to energy-efficient after approximately West tons we both now the new to feature of that micro in of annual for XXX,XXX mill Virginia. world. one productivity-enhancing system mill we capable The choice, that and an referring rebar. most Danieli's formalizing the power including we rebrand in Steel During have

a excellent rebar consuming Northeast shipping markets million the Panhandle dense planned within of number opportunities of this The standard site, and major a a access to Mid-Atlantic. Nearly West site the Eastern of across of location commercial provide XX on Virginia's metropolitan live variety providing areas. radius will people

the ideal As Eastern supplemental in for existing CMC's optimization is States. can be United the also of seen of operational on presentation, site the Slide X network

We lower stock expect improved mix of across capabilities. and customer logistics safety production mills, to generate synergies cost, through service levels reduced optimize

construction CMC's operation on budgeted approximately permitting a strategy Plant The construction. is These phase X strongly in project advance time to based to projects scheduled XXXX. of is and have late reinforcement. of leadership anticipated calendar early in begin net $XXX for lines cost million

earnings will believe growth provide also flow cash accretive investors. meaningful value for they We and our

will integration we to of process contributions a the Paul growth later. projects, be In the addition encouraged acquisition, with to continue very and our Tensar financial discuss little organic our

economic we the of to captive quarter, welcome metallics strategy and to employees Both facilities, scrap are acquisitions supply X During our acquired an provide to recycling we happy our scrap CMC. for mills. these support

a to Before market of commentary, I also CMC's emphasize moment like the advancement take turn to I sustainability to efforts. would

steel XXXX fiscal ongoing for X XXXX, sustainability report from environmental greenhouse CMC's reduction fiscal from a improvement. In emissions COX representing XX% a produced, ton a at XXXX last per X.XXX month leadership illustrates baseline in tons Our levels. Scope X decline position and published gas continued stood performance our XXXX and fiscal of just of commitments X% CMC's and of

average. heightened Scope ESG, years. that steel focus global are may emissions over per levels emissions the steadily global surprise on increased X below some last the nearly intensity have X the XX% learn actually and the despite ton These to industry industry's It several

opposite make on XX% consumes the is greener less CMC's with greenhouse impact standard micro further improve going emits technology direction, the to to as compared mills. improvements projects less innovation, energy environment. less process However, steel energy XX% mini and will mill our this using footprint sourcing in and CMC environmental gas

be fully using produced good of One stewardship up, business CMC another cleanest how AZ steelmaking go will investments are Steel in the West hand. of X our yet Virginia environmental world's decisions and hand technology. and products X/X These roughly good example are at ramped

XXXX poised sourcing. X emissions related environmental usage consumption XXXX sustainability X can you and its in As Scope our and or water its report, to greenhouse is meet also energy renewable exceed to intensity and CMC intensity, gas energy read goals

reevaluating setting will be Soon, these and we new goals targets.

I now encouraging signs to as updates and like America. continue starting sound experience will market that my turn to strength will strong market environment, be with our that recent CMC's it similar North conditions very we Hopefully, to would comments remain. to see

community closely. aware being financial are monitoring reported well in we that conditions the the investment in are press, growing and recessionary and We concerns are

of our see signs at we business, looking slowdown. meaningful However, no a

growth by historically in key first commentaries. strong X our geographies. rebar XX been have product lead we've lines in point past reliable market indices levels our indicators include that to in at across and external ahead. in These quarter both internal indicators Most Demand was stable consumption major months to the that metrics referenced

index, The these highlighted the external and phase, of me year. high the projects growth entering reading the November. and Let of indicators. reached the review components value Momentum which several respectively, institutional XX% in key in from both of commercial Index record a Dodge The prior XX%, the nonresidential strong measures rising planning

ground by monitoring phases. federal double the value a to of predesign is that the the sense the infrastructure last magnitude, indicator begin projects the the separate over will than of was up prior from year and and value entering and years Dodge's significantly the Phase X higher year, Design tracks of soon the months likely XXx To construction funding design that give these Index recently activity. a is signaling We pipeline ago. was on of X projects prior impact began value tracks projects through Dodge working The

us confidence CMC's own internal also view forward. going gives

levels first broad a during historically activity remained of the both the Our sectors. high quarter, bidding in and range private by driven project public at types downstream

be on value measured X, year-over-year a when backlog grow downstream our continues seen basis both As to Slide in of quantity. terms can on and

the are support that term, strong we domestic will near structural underway construction trends activity. believe Beyond there

by structures related year to expected projects increase into is this which federal is infrastructure the ago. as first, tons, plan to approximately XX% for replaced. rebar XX% highways, impact million tons a bridges be At such already in full and increase an market rebar consumption. domestic law will estimate a signed representing federal that it incremental FAST the the X X.X funding The within compared of of consuming Act annual We mentioned, million package run demand roughly rate, core I've

time up typical I and discussed year to calendar Spending XXXX. impact approvals, we assuming The X is earlier supports activity some frames construction and expected ramp this for see project view. data in over begin to years should bidding on awarding, Dodge

Another of the critical meaningful structural trend is reshoring industries.

yet with of shipping previously but impact is investment Currently, have be $XXX of and scale over CMC of break already massive are XX constructed to the projects, total there facilities to pace consumption. these least are planned rebar most several new We ground at semiconductor and construction of billion. to facilities. mentioned related

wafer highest LNG plants as chain chemical These focus facilities for well examples also profile gas, and production. planning. a chip experiencing industries activity natural supply of reshoring, the and as vehicles automotive Semiconductor are but the particular plants export other project battery or plastic the include on are electric and increased with of

areas chains the need of critical reliability supply equipment. reshoring options, reminded last to X cooperative materials just we well flexibility to conditions stable in under us and more operate structured of ensuring the and and turmoil political have securing regimes. and vulnerabilities geopolitical distributed Eventually, years The a sourcing set exposed pandemic we extend of discussed. concentrated for beyond have The expect the global

Underlying Turning markets briefly end-use to and stable. demand merchant are conditions bar. OEM generally

underlying in fiscal Following improved fourth service ahead. the We to expect stabilized at centers real quarter. during demand first would occurred rate the at steady quarters a destocking our continue during to shipments the event quarter, levels that

to continued indicated, year-over-year are I in market grow challenging. activity As first the Europe more conditions quarter. construction basis a on Overall, during

interest is rising residential which mortgage been due for However, more rates. has of a of impact signs a activity, strong to than the now year, slowdown showing

months. several over New mortgage declined the origination meaningfully has last

are programs should to activity attract first-time by developed being XXXX. However, more support market mid-calendar homebuyers, which

the of This Central for products. activity since wire energy crisis, some has In bar industrial has summer merchant addition, in in ongoing rod the of contraction demand been Europe as and result a impacted XXXX.

have current the and mild moderated recent also some On provide temperatures peaks, the other hand, energy from should prices relief. somewhat market

European a As position moved illustrated benefited impacted recently a net flows has year relative supplemental basis. presentation, on import region, energy large net trade which Slide XX crisis, in rebar sanctions, combined a the Poland a on of the into the has export historical ago. with has Poland compared position fairly to trade

from and volatility for of providing tended materials in Union be year has European factors, been stable, which producers. Polish Poland imported a countries. other to cost last price a the due protection extreme Electricity relative over has costs Energy both from less some EU lower variety to broader favorable have more dynamic originating created to the

outside With energy the Imports into higher trade market countries are and material Russian foreign the have material Polish and entered increased EU, logistically more regard are rebar EU, experiencing to broader to with loss has gone that to Belarusian the but accessible offset little this has the of countries costs. rebar.

of at European the of the much side the while supply the is equation helping to economic demand So is detrimental challenging impact. moment, offset

expect Within has merchant market profitably share. to first to the this lackluster in advantages a all would relative its cost favor long-term We were well flexibility despite position leveraged rebar, quarter backdrop. demand above continue CMC. and these environment, of win bar Shipments average, rod strong to wire quarterly and the operational CMC

share quarterly on QX amount Board as our CMC's the stated $X.XX Directors XX, XXXX. The of declared X, record of Finally, with represents January CMC cash dividend share from of will our press a stock common consecutive release, XX% in stockholders paid fiscal XXXX. paid increasing This quarterly dividend on of per XXXrd for per be February dividend of XXXX.

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

Thank you, call. everyone to Barbara, and Happy Year the on New

year or first $X.XX related at Barbara which XXXX to fiscal to and As reported Arizona's charge earnings noted, start-up include $XXX.X $XXX.X of quarter prior levels per share Results compared respectively. a net $X.XX diluted quarter we activities project. CMC was of of net million after-tax this million, million $X.X

XXXX. costs the We expect for to continue to incur start-up fiscal balance of

representing $X.XX Excluding first the the earnings per share. million item, $XXX.X $XXX $XXX.X impact adjusted generated were EBITDA period. the of diluted prior XX% was million for Core or this million a from the year during quarter of XXXX, increase

of illustrates quarterly strength results. XX the Slide of the CMC's supplemental presentation

segment at reached Europe EBITDA the its ever ton Our Core highest ton some significant growth, second while to America steel compared earnings in per ago. North coming pullback. year-over-year year experienced $XXX of finished $XXX rate a per drove

over the on finished generated to products ton their products will shipped. a the XX% ton of steel by EBITDA impactful American on fiscal segment were margins Downstream by over scrap I and selling a per adjusted North quarter, first Now by EBITDA review XXXX. of price the downstream equal CMC's significantly year-over-year the costs. $XXX increased average particularly compared adjusted quarter per segment. driven improved basis, improved of basis $XXX year-over-year underlying $XXX million on contributor a to for as results Segment steel

relatively of consumable ahead. costs begin key and basis, have per energy on on margins on and basis unit lower pricing benefits unchanged per could increased offsetting finished in ton for On sales controllable a signs of materials peaked the well inputs freight. Partially were due as a with alloys, these quarters of higher primarily as steel costs pricing to declining controllable were raw sequential quarter ton some

as not decline we basis, from scrap pricing by As ton quarters. but per quarter. for outages ago. on costs. result per of to products we declined $XXX in by per coming mills look maintenance will number our forward, our Margin quarter, average from that a per a fourth controllable in in decreased planned $XX Comparison metal ton higher shipment the scrap have will year-over-year year reduction a impact Selling ton the on in products from outpaced $XX increased steel but $XX the volumes, steel margin increased over prior ton prices costs

quarter product unchanged by the likely growing stable at followed They constrained a moderated of compared merchant pattern typical as of on a tracked for Steel good is bar Manufacturers and our seasonal supply the still Shipments a demand from year labor in Demand the Rebar certain basis. material levels. quarter. first fourth finished by and remained is Association, virtually geographies. were products in for mill year-over-year ago to End consumption, healthy. market

Slide the supplemental to of XX deck. Turning

$XX.X Our totaled Europe XXXX, for million. EBITDA approximately the of segment annual of $X.X that which quarter of million generated an credit included energy adjusted the receipt first

price to The year decline million was impact P&L the energy, first over energy selling prior $XX.X cost EBITDA Polish quarter a negative driven the last $XX higher results the was of contracting cost which inventory U.S. adjusted compared a as dollar. million as in the to reduced well environment, by credit of the period. relative of for Zloty into higher weakening The year

period prior fiscal the the as planned to the Barbara a due position hedge basis. energy significant XXXX. again of Europe have during solely we first well spot gains costs increased purchased dividends of the would volume actual paid year taken of were been on CMC's the the maintenance levels outage share comparative major to mentioned impact below quarter had paid that as XX% market well once compared by as the

Demand conditions are Central challenging. Europe within

the contractionary a well phase positioned believe current the in production grow energy entered as percentages, this to a by construction volatility continued of market for mid-single-digit Europe. industrial is We of period into crisis. result Polish ongoing has However, CMC while

adjust operational to and conditions. leader a serve market flexibility are with low-cost We changing to industry

Tensar our issues with $XX.X Georgia plant. during XX.X%. at quarter, geogrid the These were addressed upgrades. of production million Margins an Morrow, temporarily yielding margin by equipment generated first been EBITDA encountered hampered have issues

However, from result our overseas logistics slower a during the as operations. increased incurred delivery first costs and product times quarter, of bringing we

As a North was remaining within reminder, CMC's in $X.X American our performance Of EBITDA, million with segment, Tensar Europe million $XX.X is our $X.X in million recorded segments. the included segment. CMC's included of existing

Turning sheet. to the balance

cash of XX, and totaled $XXX XXXX, November as cash Moving million. equivalents

credit, to million our of had total to cash $XXX facility, billion. $X.X term and liquidity approximately addition In bringing under receivable accounts equivalents, loan availability and we

few CMC the a noting. financing actions took During quarter, worth

CMC's repurchased through tender offer we First, $XXX.X mature outstanding, process, million of which will notes May. senior XXXX $XXX.X a leaving in million

our resulted revolver $XXX which utilized Second, canceled choose. if a in was availability. million accounts facility loan to that U.S. million. maturing million so upsized in And $XX be can the refinance to our lastly, $XXX we a CMC net term program, receivable established concurrently, we increase And notes

from During operating relatively capital the generated $XXX.X working factor. with quarter, activities, cash of we being million neutral

$XXX Our defined free capital to cash million, as expenditures. of flow from $XXX.X amounted cash our million operations less

Our several last have improved remain the leverage significantly fiscal and over attractive metrics years.

XX, at sits seen now just As X.Xx. on be our can ratio net debt-to-EBITDA Slide

robust return XX.X% effective our to pursue growth shareholders. sheet opportunistic balance our overall and believe quarter. finance CMC's tax and cash rate first to we the While was flexibility provides projects financial continuing organic while strength in strategic M&A to us

to ahead a rate XXXX, effective XX% Looking currently of and full XX%. between we year fiscal expect tax

outlook. spending capital XXXX fiscal CMC's to Turning

guidance driven $XX occur we is and We total. spending view in expect Virginia increase compared is to $XXX by year. that prior million to million million now CMC to related Steel $XXX this between the to likely to The range West invest

the have of average first per Transactions $XXX remaining the million of leaving buyback initiation $XXX X.X CMC amounted authorization. to price million through fiscal roughly program during roughly QX quarter share. under the Lastly, an million, $XX.XX the at since shares purchased

turn discussion This back comments concludes on Barbara and I'll my outlook. for remarks, the our to

will Thank volumes year high are term. you, XXXX bidding support Paul. the strong We Downstream remain historically should over levels and confident be at backlog financial near of that fiscal another and performance. activity

we in the in see Arizona capitalize forward the look construction X, which ability strength to micro spring, the newest we on CMC's enhance greatly of Additionally, markets. start-up our will mill, to

quarter second anticipate good quarter. We historical though standards, down seasonally the from results compared financial to in the first

be demand our expect America, and while uncertainty. by We challenging continue to customer for healthy are pessimism in and more products North in conditions impacted could Europe general

well earlier, leadership as to operational positioned However, Poland in very compete cost operations discussed I CMC's position their given are and flexibility.

in to both levels, scrap America historical over remain first likely compress margins levels. North relation in to elevated they Europe anticipate we and to While quarter from are the

CMC outstanding would Once again, of yet like delivering I our another to employees of thank all performance. quarter for

with will [Operator question our today Chieng Instructions] And come Emily Sachs. Goldman first from

you're the for what Polish that you for seeing? anticipated. morning. to Europe segment much off the asking there. perhaps of this share steady share of versus Perhaps update like expectations start like taking look than by you the of much then were I'd around strength certainly sense got And could some how year? the the still Thank could higher remainder market Volumes construction if volume a that of there you've is

you, Emily. New Yes. Thank Happy Year.

So say I following. would the

strategy over If at to strategy a have creating we've we our and Europe, you the product strengthen we that our Polish expanding operations have operational situation by of tremendous offer. deliberate where to products flexibility range look had time a in

rebar invest been a upon into So wire were strategy to dependent there's XX, SBQ years, investment rod. and if some you And in back deliberate we XX and even construction go highly products, ranges. merchant

is demand does product the the us that for us with flexibility demand. shift the gives as or conditions mix to market better what to change good And it markets

to markets shift those worked structure other us to hard the really to combined X relative a have we've In in factors the advantaged that really the is options have cost that strongest And have demand. addition, to region. allowed

construction fundamentals still Poland the but in forward, Poland good are of some region. I other earlier, I So in compared say positive residential, GDP as would growth to good albeit as said there's in and parts we reduction encouraged, going about the --

That trade filled opportunity Belarus. and that the has I There's from flows -- to as Russia fill of was the and in CMC indicated, war. have created demand as changed step result for a

of take operational allow factors to those to low-cost that take are. And our we're operational our opportunities to shift going market have combined, where advantage of advantage and to good to forward. going best structure results us the continue flexibility all So will

very provided. That's to cost and the peaking deeper It like costs around the might sort in that as presumably coming have what follow-up, the leave sounds this to calculation? down might of And expecting weather that could you as some Barbara. each a commentary share seeing things starting see components early signs at to Great. brought maintenance structure maybe hit be warmer be clear, But perhaps you're of some love cost of would the dig I'll was different may be certain energy of well. cost we And you that. year? should then in when the activity it controllable down,

me let some to comments, more a give Let then going Paul broad couple and of I'm specifics. make

at so If unknowns. there look reaction COVID and and were a disruption because hit, economic look you what chain severe you happened back many at there -- go when and severe just supply was

was when saw forward how broke similar price be. If I'll what the where energy you their and this use skyrocketed the and -- out you example uncertainty there war because situation Russia to would a would Ukraine, the around fast energy Europe all between source just in

an as in much disruption. other massive COVID result materials, You that increase And that because after saw to had sourcing. a and things also so same to supply COVID just the war chain supply not probably things disruption. that started in chain The concentrated chain such number alloys it was saw as was during reaching, were supply raw of a the is good a far down, and and there we an example we readjust calm as abatement of

to the seen case time But to alloy uncertainty abate and in to the started on, found continued sourcing supply as as we have have adjusted clear. and has we've options downward started chain costs the begin has have gone of become particular, prices other as -- in the war, adjust and

how adjust still So and but inflation around figuring then to let I'll reaction abatement an due initial everybody broadly their the definitely to comments. supply is chain. some out going Paul on that world, make there's issue further But

really comment the in head The as I cost only on add natural I hit the twice would year contracts the May generally seeing on and what our Europe. the in October time side. gas far cost think comments on a Barbara's gas nail America natural the in North we're Really, is frames. reset, side essentially the as to

were October, reset. and until operating that And prices they we gas so were then prewar on natural through

Thankfully, the our reheat furnace. to limited is natural gas

And so Xx the was a major not cost, what but around cost previously. increased it

the outages, so in which And With the operations. other got your we've to the one really that's increase And to in respect question it's some costs. area European specific seen regarding while maintenance a couple this this major a it later down back replaces week, starting be And furnace. as outages Texas coming will in fact, year. in for the half Seguin, the of our facility we've

steel. There will be a melting large be period of time in not which we will

to customers out of continue efficient out of technology have in. coming continue we But on some serve roll more outage, the facility of of new throughout that product, ground, get the benefits put period being we'll to will have time. However, billets lot and coming is a that the and we

well does team excess just in down a testament that the of life, about maintenance furnace produced has the excited to It's service normal and the a that operations So there. that. ongoing

our have that, mill provides outage, enhance stands, to reliability also Following refurbishment mill. third I mix. another again, some our to just rolling and which it's it's in the new only us named Alabama but quarter, the we simply increases some those, because our of -- a of and product not just roughing And in that

out And get we benefits forward. that so going of

we us So the forward be look but those and to will into future. move opportunities significant, ensuring provide as the reliability ongoing

these Reliability hard critical. market hard been we've enjoying equipment -- as of running market conditions. hard good this conditions, is these been these We've period

so And need to ensure to maintenance the continue is the to we continue ensure to do that there. necessary we reliability that

will Timna Wolfe come question Tanners next Research. from our And with

more, trends a seeing ask Wanted about and that in the could, if side. bit X downstream Slide I to you're the

it reconcile seems trying downstream trend price just over, the about Is comments the higher upward there comments. to with comments like reconcile products. bids those in to of but to Just and decline why trying in some backlog prices? I'm the about rolling also be explanation

for Happy Year, the you Thank New Timna. question.

ramps We business. move the activity And the time some when have bidding past lower fabrication as towards first in the on year. and then changes the you months, lower during activity side the normally, we frame we end of get through of tend winter see seasonality in construction the that the activity it year the because to there's of up

out activity a spoke of in like I jobs seeing The very and and they're in those, other miss and the thing be that large and that just the these quarter pipeline, is can would bit of lumpy a into fab happens more because it next of, but to and in there little quarter. we're job semiconductor say anticipate the bidding some booking over booking fall we they're I there one

jobs some the timing. about very had we've So large all just that -- it's

once concerns. monitoring owners that are and we because we in of going familiar a those of projects move cash. particular, And booked balance projects sheets They're and move they're it confidence carefully bidding really we're with they continue forward, to upon not they Companies dependent these types the the of all forward. industrial strong. completed. are And get funded, those projects of financing projects, in pipeline economic Overall, the very all they're to strong see will to very, have get the

not an activity seeing are we in rebids. increased So

increased And activity quite encouraged in going We cancellations. are we remain forward. not seeing

terms supposed seeing as X? year cadence? guess thinking follow-up, from on be what cadence could. calendar in of the up ramp the would Arizona year, but of similarly, infrastructure any in and where cadence then I you if to little it's you're timing about stimulus a I bit talk sense. comments we to helpful should I of And a ramp-up That's the any just Can makes a Okay. be and great. now know

you. we're is best Thank ramp this back The And third mill. you look Yes. and more mix. is I product micro is point one merchant Oklahoma. Timna, AZ on to, the can because to our adding at the X This while go to in complex

rebar that's we're familiar that We design, with with. because are, starting something by supremely

crew. X at and anticipate the layered I the be Within Oklahoma. productive we exact similar a was crews And have in we don't situation merchant were very will And X, what front similar in quick. building enhance so capability. me, and it ramp but follow I I and would expect be would X and that at to the to quarters, fourth here ramp experienced of the

And would for you point so that just trajectory to Oklahoma. the back I we saw

design to reports numbers has once it active it's the phase. preplanning a and massive been As moving course, of steel. design and relates very there trend moves for and the quoted believe in and the increase I and phase was to phase, year-over-year see that eye-opening Bill, Infrastructure just into design it the it into then those. Dodge And the I in preplanning then projects And then, into encouraging infrastructure, bidding orders

start at of predict. half ground. think starting the hard to references, XXXX, to the if that We those projects I build there. and timing, to come and back Timna, historical then moving But translate months and the increase kind is into -- so you exact takes activity the into to XX backlog you to those The of to fruition are it from those going look magnitude for of use on XX

our Bank come Winder America. And of Lawson from with will question next

all, and from ask Slide hear I you update. XX. you to would for the to thank about like Nice

companies you geographies? it whether products opportunistic downstream looking color You of on be provide or type other at, mentioned you target any might into diversifying might M&A. or be perhaps Can different the

amount on color Unfortunately, targets. you, provided Thank the appreciate we of I Lawson. historically, enormous specific haven't question. an

if you with and we excited go will that into we a And are our that's will Investor foray of today. what whatever Clearly, -- back about Tensar you ago, you we that clear toward. base Day it our build aren't. do, pretty of what we I Clearly, us have we're the think think off I geosynthetics on see couple were the So look to you can one acquisition. years

that and downstream. full we're merchant, at rod our say which rebar, encouraged really and But from then leveraging you And day commercial chain, full if organizations we and we're to product much that what that proper I that really and opportunity organic single look wire value gamut. on highly have would see base integration recycling seeing an so we we is with -- But superior and business every front. focused we have, look across the we're they the have, with that perspective Tensar, on grow

and to strong, geography, you As key North it market are and relates to core America, in a if we as is know, that us.

We also feel our very, operations very Europe with Polish strong in being beachhead.

throughout differences transition, whole And Europe. complicated through different massive so leader is with going all there, is in countries create see And industry. We countries Europe and we're area. bit change Europe opportunity do more as going opportunities different this this we although our which don't in to the growth in and rule out and energy a various a

can interesting something us. to that so be that that's that leverage the we to extent leadership, And could

can't we really targets. that, get into beyond specific So

Yes, that was helpful. fantastic. I know Very

You performance? Would the a production the Tensar response, you some actually your an provide time you're question able in remediation to I plan about I think the to for frame be in improvement several color times ask maybe on mentioned and challenges having. which wanted to that

Yes. one and Thank our time you. steelmaking operations installation synergy operations to line, that we due a the they things refresh already of then a of there is and lost happen that diligence. press. over on necessarily synergy didn't But happen. press which had the those were But because delivery knew from all They other needed through the and delayed this. there our press And press. This in challenges, chain a great time. bottom a we identify They order where they supply is to

performing. in, the it's it's The installed, press So that is challenge. was

from But of is . The really and at and commercialization in expertise issue is that products. side. necessarily comes development is the us. new on new just manufacturing behind innovation so core their not Tensar synergy product And superb

at superb manufacturing. are We

when so just enhancements safety and our all on added productivity their to experts strength and it and find undergoing, leveraged number able the improvements And the a kinds we be technical them we or was to dispatch ground saw some our through that of Morrow other to muscle that capabilities. of help challenges and were of things

us, and world. is had incur problem some the around the would abatement we of we So to costs differently expect to the move fairly to just that immediate added see product behind

Fantastic.

that. you the not Like, but extremely follow X, question, for and Thank on detail makeup what one bit a up that? what is luck the proportion of my on providing too reshoring? for That's volumes. much more helpful. pressing example, Could provide you maybe warehousing to I'm to is proportion downstream of ask little that hopefully, wanted bidding Slide Now and backlog I maybe just

in we're time. a And It's give would it's What I the think a don't be prepared think towards projects we granularity. don't completed. increase to they're I infrastructure get expect And one between that to going I they're say strong balance nonresidential. any well-balanced backlog, mix. heavy segment. is weighted And to concluded and would and infrastructure it's that going to over once

in I we think there or the that opportunity backlog going the to service beauty is real margin provided an enormous material we forward message out going play and that as the in backlog. is is that evolve

KeyBanc will come Gibbs with question next Phil Capital from Markets. our And

longer-term on it on. what's the to were what your questions as good basically framework? wanting hit But that M&A to of I asked relates to already Lots further strategic growth openness we're focused was

the of good, in a balance flexibility condition and a things. have I ugly, followed through and bad to lot that it's the has do is, been strong. us extremely our think Phil, gives you it It never the the sheet us

late, look that that the to do We balanced share comes can thing the flexibility of the fund the we strategy. we as the through been along. talked capital and at and dividend. consider growth if and allocation to terms and returning think that have we've right we've about As continue well about confidence as complete a shareholders leave increase of opening you just organic And in that in repurchase the more know, to the M&A

And capital long you've to to our something strategic we and the acquirers of enough and very we that it's us when do think offer that we we're I know disciplined in combine we're very to also that and do right fit have terms disciplined followed allocation, acquire. when ensure

I balance of can the kind capital balanced still and activity support allocation sheet while So strategy. we remain open, think having a pretty that

follow-up. a just then And

-- mentioned had excuse a XXx something You XX increase in a about me, something.

perhaps quoting that. infrastructure something I or as exactly it I missed you think what that. said related around to like

the That was Phil, design phase. the the believe, then that and infrastructure, increase around massive preplanning the I in

Versus X years ago.

us. new orders infrastructure Infrastructure projects, for the is begin for which ago years translate X Bill really to Versus indicator the for to backlog leading into and

indeed, in market the incredibly term. that, encouraging coming we going the see are near here sign to that's to So an that

Paribas. And next come question with Gresser Tristan BNP our will from

the for off rebar follow-up demand start regarding I'll outlook U.S. in Maybe a and consumption with supply

look capacity been tons maybe projects X around there's XXXX. number you million rebar ramping If at of potentially the there, up picture of a domestically medium-term announced new by

there's a not the do balance million ton worried U.S. for built? the have feel when Bill. maybe I medium-term You how there to on Are flagged that enough? And impact the is rebar really from Infrastructure you be that you could this X.X rebar market? But the too there scenario your capacity wanted being thoughts just much

I that already been X don't some in as that the be has quite because absorbed I would know Tristan. you, high our numbers as think Thank Yes. of market.

were very at disruptive was we was the market, concern the investment we And that you If that introducing the as and you as and the absorbed not that be to was far Oklahoma to and time say market. I I couldn't made, observed capacity go by heightened back what was fully a there it it can new think see absorbed.

COVID shutter the acknowledge investments. have the difficult is that has Nucor I And -- it's which made during to decision some Arizona, to facility. made offset we California we certainly, really an

this at not I'm time. so And concerned overly

not numbers that new we demand been capacity more products but I've seen to necessarily monitor and significant same see would capacity, the of and going what there's our unlike some is tell overbuilding substantially always it's what where think for online capacity, other -- it. increase not you're us I brought maybe that a

point flexible I think would adjust mill capacity can I is and mill, very other is the micro mini when make demand changes. And

a as have does micro or flex fixed model, cost to mill blast not capacity, mill capacity. very unlike portion that easily which mini as We low furnace

premium spot pre relationship metal My your currently mentioned have cost reflected a spot more development. second that and past U.S. on thoughts So the is the normal products, cost a price the helpful. return prices think to market U.S. more rebar presentation, in clear you we've you've fully current compared Bill, in forward being question Infrastructure you very to on seen we to one developments. X for years? Do now flat That's should and adjustment just rebar in are moving are All over the seen spread right. meaning wanted structural the that market the your to see what rebar

the over margin band structure tend that really plate over products. products. tighter products a I question. Long I a but metal for I compare of look Yes. much rebar a and upward products the flat particularly see space, to Tristan. in at the -- provided market, have fluctuates, should shift highlight margin flat of would long, stable a more think side peak complicated factors, many lot and than There's through cycle. but do think to that the structural you a a the trough is long much of consolidation medium-term has Thank It's you, also between long and had you stability. that margins there it

And I that see that will disrupted. be stability anything that, suggest would don't

long see on So we much equation. a time products, have the side than for of what consolidation, and rebar known you that margin stable the more flat long period was of before metal even

conference will remarks. session. Smith over I'd the conclude to our question-and-answer like for closing turn Barbara this And back to any

And everyone, for Have a weeks. investor on thank you to in and you, today's during you. forward with many our coming Thank of Thank Cole. We days speaking us you, look great day. calls joining the call. conference

concluded. now presentation. The today's for Thank attending you conference has

disconnect. now may You