Commercial Metals (CMC) 21 Mar 242024 Q2 Earnings call transcript

Hello, and welcome, everyone, to the Second Quarter Fiscal 2024 Earnings Call for CMC.

Joining me today are Peter Matt, CMC's President and Chief Executive Officer; and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press release and supplemental slides that accompany this call can be found on CMC's Investor Relations website. Today's call is being recorded. [Operator Instructions] I would like to remind all participants that during the course of this conference call, the company will make statements that provide information other than historical information and will include expectations regarding economic conditions, effects of legislation, U.S. steel import levels, construction activity, demand for finished steel products, the expected capabilities, benefits and time line for construction of new facilities the company's future operations, the time line for execution of the company's growth plan, the company's future results of operation, financial measures and capital spending. results statements speculation forward-looking risks and that cause similar certain may and other from could and materially assumptions are actual and are and considered involve uncertainties these These expectations. differ to subject to filings on Forward-Looking the to are the Statements and including section based risks described are latest conditions, those but of These statements that beliefs with in current reflect uncertainties, company's the subject U.S. certain the company's risk on including Securities company's the Form and report XX-K. annual Commission, Exchange latest

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

otherwise. presented found President or Some be reconciliations references references such Chief company's and the are for Matt, end and quarter or Executive year non-GAAP on now company's fiscal fiscal supplemental Officer. for I like unless measures to presentation and financial to can the website, stated over to be earnings made or Peter the conference numbers slides company's in will to year would quarter. And release, introductions, All remarks opening turn the numbers

-- congratulating team setting beyond. U.S. in adopt. EBG for CMC, update our outcomes brought steel second the outlook and our in equates the will to recordable a as At this call. I particularly industry-leading the our like I our standard and significantly condition than everyone, with goal begin leaves CMC they their part safety safety, rate eager CMC's in everyone quarter am it important employees acquired been joining less thank is have safety for by locations proud An improvements process within earnings integration discussion which recently Businesses company better made morning, our and to you to our practices, culture businesses than to as which ensure conference avoided at Slide of recordable of new all EBG Engineering operations incident shift rate current group. all same I future industry an an we been injuries the performance to stakeholders. further they overview acquired begins Emerging to Business our ago, and CMC's at whole. instilling X, Good cover which the a record. This and and year be operating on results provide and fiscal incident Paul quarter second for and greater this will of CMC's for for will seen improvement I outlook And performance, I and committed projects. of can better will are discuss has market detail, quarter's strong in cut presentation, the several then for share data company's growth on on strategic for financial after financial all morning, conclude Compared The of for and total third is with the arrived. a our and half, to quarter earnings morning's view would X the our environment.

call to the questions. open then will We

in the Investor that Relations call, provided the regarding website. on quarter accompany can is information Additional this found be which slides CMC's supplemental

commitment generative cash cash to to power repurchase end payout The financial $XXX with XX% returning allows share shows to to attention The prioritize want call shareholders. CMC's CMC's of I position announcement to increase January's since executing together of and investors, represents per demonstrates our dividend cash a simultaneously increase XXXX. strategy results, capital your our financial to our the XX% the yesterday's $X.XX of returning us dividend. in quarterly million balanced CMC's back CMC's allocation and while reviewing Before quarterly in authorization share increase our of strong growth plan. business growth

this despite As CMC second in press core footprint. operational reported quarter of period core of another our across and and well XXXX EBITDA we our slowness weather above margin was release fiscal financial morning, historic issued the strong performance. much disruptions of generated EBITDA averages seasonal

on were recent share net $X.X the that $X.XX We for ongoing continue or strategic of and and sales billion. enhanced $XX.X diluted flow to the our earnings transformation cash execution. CMC million per demonstrate earnings second enabled produced net capabilities by of quarter

margin metal impact items, margin also the capital to the into like during $X.XX strong a profitability point. of construction believe were a in metal we several steel of issues consolidated quarter starts $XXX.X delayed the from on I Geopier products. excluding Outside quarter. better excellent quarters, path the a energy experienced Geogrid group balance, strategic a We in per reported at in improved and price onwards group some these market season. I expect weather diluted levels were Digging summer earnings XX.X% outlook. core million, for services, would are figure, increase breakeven high toward margin into were construction temporary actually has and the beneath steel conditions our would were to emerging adjusted hard. EBITDA from sales we monthly hit sequential generated long performance businesses recent Europe steel trailing detail, in increases hampered and invested discuss our and to of exited more nonoperational particularly in us which projects share. CMC segment combined performance, the $XXX.X or has margin weather that cost products Group metal on term. Activity near challenging Project quarter the and cover allowed compression Excluding and delayed results rebates. by This like selling which and by Financial modestly. EBITDA set the on -- rebound spring core American December next our The will U.S., a for come of with impacted Texas-focused disruptions and has Steel North in CMC's producing XX-month Paul our CMC return and million heading XX.X%. Results

As healthy focus starting future be great this from a with position creation accelerate leading growth a path, our starting of our are strong multiple we to value maximize businesses twofold: we presence of plot platforms. across CMC's in customer products primary to a each excellent strength and solutions, and major and company strategic our will culture, relationships. From balance point, sheet in current

less push margins planning, most into with and that decision-making. In the that profile margin at laid greatly It critical providing can the our is cycle opportunities and fully and groundwork volatile key through has changes, are how safe them goal focus reporting better ample value leverages people, by CMC our we keeping existing ultimate expanding organically to for Our recent drivers looking with potential. their to structure our enhanced for helped inorganically an resource, full businesses our and create our our efforts which us We our organization visibility begins the these all revenues. development. higher enhanced and

reach there CMC has built are track diligently we this. is earlier, world working on to a noted class, be but done I more record and safety that can As tremendous

a units have company's key CMC's a the created of margin benchmark, bench A deep that in ensure of of we We range business have part to quantify critical which and skills are a to commercial enhancement and also the commercial programs with build tasked identify, are operational efforts expanding CMC's with group to development across our on entire company's end, and DNA. To working our efforts span and enhancement margin future. driver organization opportunities. power talent company-wide we a realize operational optimization, excellence core closely

can early and optimization found, offer at already the are many examples. have concrete efforts stages, the opportunities Our still a across few businesses in both individual but been enterprise. I

to opportunity and lower shorten freight logistics customer and final service. significant is lanes there our mills which will shipping between and improve First, points, costs optimize

which unplanned enhanced reduce downtime. practice benchmarking lead achievable to operational and improvements increased internal see also through and best and We costs productivity sharing, can

we and side, service increasing of we are These businesses, believe enable for efforts capital with cost concert a the share low initiatives, opportunities CMC's towards and revenues. In On to that CMC's targeted are creating growth a accelerating platform on sharing information in investment. unified group, representing our and grow prudently existing avenue value bundling focused our inorganic commercial capabilities unlocking of margins customer both solutions. wallet are and sharing organic through create lead across sales will we cross-selling, trajectory

you know, flow West and Steel Virginia including organic capabilities. there earnings will to As projects Arizona underway, add cash X already CMC's that and meaningfully are large

previously, indicated a that dry Beyond we capital CMC expansion these, platform in achieve organic through strong outlays. Moreover, a entail to existing acquisitions. we lines significant see modest value-accretive as have opportunities several product growth has financial powder only and for

construction of end expertise will We in improves leverages value seek early-stage proposition, and a way our materials customer core, portfolio that our strengthens build enhances our our market and to out margins. CMC's solutions

about our and there shareholders. these initiatives excited As pursuing we strategic additional leveraging and year. ongoing, to by sharing believe extremely to tremendous plan, is the today, great our we a bring benefits are run value CMC execute will strategic We business look vision the unlocked as details this we regarding that we level later of and excellence CMC's next is grow. Planned be more development to forward excellence but

quarter brief update on progress we've key on strategic like projects. during would a Now CMC's I made the to the provide

produced As micro exciting We congratulate CMC's press becoming would team new -- grades. MBQ. on successfully variety operations or release, bar the we first in Arizona achievement. and like merchant X of commissioning to and products milestone product set mill a began and a by this in the quality January have noted produce the sold our in plant MBQ profiles world merchant to I

lost ramp-up construction this amount excess inventory across During temporary important and by condition experienced that large Coast. altering the a The state. outcome at several end for X the next address balance the rebar historic an AZ an months. can over on market led number rainfall of days planned been West the market help has of our a the of schedule We quarter, to California, sites

on commissioning market prudent the our Despite MBQ ground, we is believe the a the of the complete nature of Arizona monthly EBITDA our continue how forecast the breakeven not months. several on our Work when are evolve products final deviation complete, balance. we future our for original volume Coast late to have CMC's schedule, fiscal -- ability of all and on improvements deliveries plan fiscal better at production impact West progressing next Virginia we market from the that provide scheduled are said, the is anticipate to we total the does, and change X West however, approach frame site in capable is Site to during and early commissioning That in nearly is given Given producing. on efforts summer. spring reaching XXXX. to quarter. the realities expect for start-up the for do XXXX, to Steel the will return over do fluid we This rebar don't focus rebar equipment time capabilities we in well, the calendar and pushout fourth initial any

exit to America. in of North remains CMC's Construction busy and period the slowest year now the markets Turning summer seasons. we into the spring and activity healthy head as

for its awards signs are a We its record. particularly institutional own number shape since in best our strength We residential and pipeline buildings, their following strong indicate energy in construction -- CMC's and saw rebound and quarter XX% best and see they particular matches backlog structures. continue hear contract view, in drove broad-based from wind good sharp increase encouraging This an our project mid-'XX, in was sequential who to and manufacturing ahead. quarter internal volumes a bookings of on awards for customers, that second downstream types. across new facilities, new second The backlogs

its added history, Department contract the Defense its project in backlog, value of Additionally, Hawaii. in highest to CMC a

healthy period. and anticipate we multiyear ahead, will our both in over term pipeline construction near several key activity remain with Looking a the areas driving

is first The infrastructure.

onward, half and of to consumption steel second to XXXX expect in and works for years as mature. highways, previous fiscal begin projects public increase awarded in bridges We other the

transportation of New as Texas, the which over execute states has XXXX. next only significant about against X/X Several projects are date to its be bidding key will are budgets. months. the projects healthy few also Leading market at states their the awarded expected for to coming pack expanded to a for transportation rate infrastructure our and of release budget

Jobs also are Act that We and activity investment of the serves. struggling across impact the on infrastructure geographical many ground CMC markets

tons generate to incremental portfolio roughly full X.X CMC's reinforcement program will to annually a We continue run tailwind million rebar that estimate as well rate, consumption once solutions. provide of broad of the at as

The driver opportunities stage pouring consumption. notable be over and represent possibilities rebar and estimate offerings of in new sources for confident XXX,XXX We bid beyond months particular once-in-a-generation sources nation's a supply ahead. will beyond we CMC's The come, investment has its emergence center the product in to chains market Geopier, We rebar months activity. have years renewable few the that discussed additional key manufacturing number into as demand. transition harden XXX,XXX to data grown remains demand systems projects and drive Geogrid, We the currently the these strength the high-performance cycle recently, these growth the and that we infrastructure, robust to a data like the few under The the and of include trends seeing reinvigorate quarters, anchoring that our meet artificial structural reinforcing that facilities believe More of big harness intelligence. significant, long-duration tons phase is projects of very pipeline into in in energy dozen will previously, energy last construction we expect power the the total reach investment several enough centers to areas activity cycle last remain are energy. and reach will can't cleaner seeing of steel. structural benefits other with investment this construction planning to awards. development aims of As fast infrastructure, for and built wind data substantially project were

market market Steel December Turning product fiscal And set in the that import fiscal see third throughout fairly quarter. import environment heading improved the to onward, in combination We in a late the should season. underlying influence import XXXX I margins abated for early a stage the recovery volume mentioned, steel and margin margins and producers second sharply reduced, be -- and pricing from pressures improved terms current market quarter, fundamentals XXXX rationalizations, for have largely in limited. of construction better America, and driven favorable into the Consumption domestic domestic levels during demand The the North the remain have second as intermediaries seasonal to environment metal increased to levels offers monthly summer spring This by recovery. late expansion participation with limited subdued backdrop for some Europe volume Group good demand significant supply during providing due recent supply margin responded inventories remain balance. while and some largely and in at have but months, our driving quarter.

we a to stable residential originations building most in return which Polish the sizable significant mortgage of in new growth. program to demand remain government's to increase response lead been the to fairly of and homebuyers for permits. expect construction, our exception ahead, Looking The new support has of a with first-time levels appears poised markets

more turn injected economy. With rates market market in Poland combined Central profitability. our will the now break XX operations European production spring, the potential In Longer should backdrop, are to financial funds into Polish projects. we improved is management related to see to the strong team that, crisis COVID fundamentals term, provide for from seeing the over the residential billion efforts the near strong our detail cost to toward relief as to drive head our -- and energy EUR recovers breakeven we to term, -- I results. emerge As with Paul into higher order industrial and from discussion on

on Thank everyone good call. the and you, Peter, morning to

commissioning XXXX to year fiscal prior per $XXX.X Arizona $X.XX $X.XX charges of per and of earlier, diluted $XX.X net to million Results second of million net compared earnings $XX.X related noted levels share, ongoing included million reported X. share quarter or As this respectively. quarter we of after-tax efforts the

per of margin finished strong the now ton strong North $XXX.X equal at million of in by illustrates of generated Segment driven EBITDA steel approximately Excluding were Profitability a cost benefiting year-to-year XX% downstream quarter, also scrap, the was to over a adjusted and compares still lower the of per during comparison groups result. Slide million financial to controllable changes diluted fill segments of ton. by basis, million average pressure group million these EBITDA in core outside or year margins historically from a XXXX. of remained adjusted Europe $XXX.X of on prior adjusted steel margin period, CMC's $X.XX scrap primarily costs were the conditions for margin adjusted levels impacted decline group adjusted our XX% to or historical XXXX, the diluted in supplemental million emerging per in American business for compares North American the XX% was U.S. Consolidated period. year-over-year generated quarter quarterly XX% delays of year earnings XX.X% by controllable review the second on and XX levels cost EBITDA will offset EBITDA decreased our steel $XXX.X Group for but the results the and items, to project per primarily Steel The products. the ago. I from This U.S. the CMC's quarter presentation over and prior above $XXX performance. second difficult of the improved North XX.X% the $XXX.X year American earnings during $XXX.X a partially EBITDA the share share it's shipped. CMC's while weather year $X.XX period. Core lower of and prior performance. EBITDA Adjusted in representing declined to due to

softened this metal that quarter margin should reported weeks. not release expansion the the in until products due as have be CMC's quarter, costs through It our the likely or late markets normal to although to quarter. achieve margins positive in mill will have no quarter steel Within The factor inventory have last fourth is during the read, the within cost are our on American in third expect stable scrap we today. lies noted metal improve group. decrease. for as that you guidance EBITDA costs during sequentially, in impact third margin the the expected environment, hit scrap over This As flow to of the modest doubt earnings our P&L adjusted will press in third early on scrap levels quarter North our operations. inventory steel reflect we period third beneath second quarter scrap This few cost

XX Slide to Turning of supplemental the deck.

which Our Europe an This of Group million million loss million makes of for improvement, driven on energy footprint. is when by a the adjusted improved of EBITDA operational reported $X.X performance second the cost $XX included energy controllable quarter-over-quarter of a Controllable X and cost result than each impact more was more quarter shipments. of across pricing Steel over prior and improvement ton, sequentially The costs of both a a scrap lower as offset taken losses basis than margin the higher excluded. year-over-year the rebates the average per the XXXX. in XX% measures decline quarters lower $XX in sequential and

positive CMC signs least driven period, As prior million Polish of customer but $XXX have X.X% and within Middle Despite increased from Business toward footprint, delays some the addition project been pointing mentioned, demand strong the of and Tensar several quarter, were issues, net sales that systems. anchoring Underlying rates the into bottom United market and were are activity momentum units States robust inquiries there East is North in supply by and balance. Emerging Europe better good conditions largely order and across construction demand in Group moving the by market that that the and Peter American season. to delays generally shipment related were weather past impacted second upcoming weather a quarter during markets. at year the levels encouraging the

EBITDA begin were the positive projects from impact anchoring million and of EBITDA QX. Adjusted for $XX.X CMC represented period. million expect from in global adjusted were mentioned. a strong in from systems year We market to in heat also addition the the Business already The of than the factors decline XX.X% ago $XX.X the operations the Tensar margin markets by of Emerging down prior delayed a the treating year offset profitability of our a as Group more

profitability quarter. the As third expect Peter this recover we in noted, in to business meaningfully

to sheet, and balance Turning allocation. capital the liquidity

cash XX, $XXX.X February of equivalents As cash million. totaled and

under million addition, of total In under accounts $X.X facilities, $XXX just approximately we our and receivable availability had bringing credit liquidity billion. to

from driven remained CMC's million for from we by the $XX significantly was $XX.X quarter, Steel equipment have despite improved our the of attractive leverage last fiscal expenditure activities capital. Capital principally several cash years. cash of generated million working purchases, During use $XX Virginia. a metrics and of million investments in over West operating

which our on debt-to-EBITDA believe Slide XX, and XX%. ratio our M&A, sheet return growth financial quarter, our just was As overall is to the at our continuing while only to lower net can expected XX.X% pursue now above strength flexibility while tax cash rate to projects X.Xx, rate robust to be year second seen was strategic slightly net shareholders. CMC's We to due capitalization the the debt sits levels. earnings full finance organic balance effective us in and

fiscal and effective tax looking effective we at between XX% an And through of currently 'XX, quarters Our rate XX%. anticipate stands rate X ahead tax XX.X%. for

Virginia Turning previous million and $XXX total. in anticipated shareholders. our reiterate of has our earnings million. of Outside normal to providing cash CMC's West $XXX call includes fiscal guidance substantial meaningful dollars commitment the outlook. fiscal approximately of prior capital returns sustaining Steel to for XXXX construction X steps We the million of further between of in expenditure capital taken since investments, 'XX CMC $XXX competitive spending to

to of of cash totaled the execution a with during buyback repurchase Transactions investors price both the during CMC's quarter shareholders. shares our increase XXX,XXX of announcement program to repurchase distribute an increase of XX% $XX.XX early accelerated in that dividend approved attractive share. the our share This our to of million to portion January Board quarterly flow approximately avenues million. follows the Directors free of at an utilize $XX.X allocation. core authorization. February We had it to to $XXX is second To to our comments seek back to tenant mentioned, average of of end, a capital approach CMC's for payout. per Peter As million The for returning cash Peter current authorization. This the our and concludes approximately And XX, our as remarks, outlook. $XXX.X I'll repurchases my turn we on additional available quarter under a

Thank you, Paul.

expect volumes margin during North America a to group sequential Europe meaningfully, typical challenging, and but by follow fundamentals results the pattern emerging third third to in basis. adjusted approach for a the a shipment healthy book. remain are normal steel levels the seasonal strong on We within segment our largely quarter, EBITDA stable EBITDA is while our for be expected Conditions Financial group improve to market demand, breakeven seasonal in uptick our the underlying order anticipated businesses should during quarter. driven should

for America we Europe We strong anticipate are increased already and and Group in backdrop programs steel continue improving the increased infrastructure Businesses conditions by and robust Steel other demand. Group the first-time an summer investments, to as residential program a group. Business aimed North support from which construction will to begin our spring demand driven activity benefit government-sponsored investment activity Steel further impact both expect construction Emerging and should buyers slowly at government

CMC's of made and financial proud We are them the possible. transformation that results

their execute of has another quarter to like positioned should we even years America and itself for trends shareholders. Powerful to potential North as drive and structural come, very value confidence delivering our for of key and construction our our employees We performance. yet about beneficiary. I deliver excited in as to our a new strategic in priorities solid CMC more key future trust the activity customers thank for our CMC and all heights significant for are reach in would

And to you. open maybe it at questions. this Thank let's time,

Instructions] with first Our Tanners comes Research. question Wolf from Timna [Operator

I we timing guidance you'd as common X thought. margins improve. did could, the was think the after of to it wanted absorption the little scrap the -- years in hit of been in maybe bump. flat inventories on thinking relates QX, explanation last recent volumes like sounds America cost typically, in a stabilizing the to you in pretty if you But big a the mentioned. probe bit? really some drop big maybe it's prices I I a has some fixed was And weather I there North And the have

bit there's what's more color if into margin just And outlook? else to anything guidance, about why driving the So I little a there? that would read like

Yes, Timna, the the think the reduction, I came as impact in to costs it scrap here relates significantly scrap fairly March. of

And than other the is P&L costs, on of facilities what rate. utilization we've impact so a to in our more very that hang realize the With actually continued we'll through the terms fixed significant at in high of to periods. respect the comment operate

the despite in so a being shipments And production the by impacted slightly QX. We've maintained lower level our seasonally rate. slow

of performance continuing to terms into typically as because enter really of don't level see cost a mills at the a bump we operate utilization. big the the we in summer we're So consistent

in pretty seasonal we'll realize we provide, which anticipated be that and be see to are those volumes, consistent. margin the earnings in the the metal have the on we growth the high improvement. the to increase between pickup of end So is the historically QX expect But margins seen be QX. And really that will that the we really, normal reasons to statistic point, yes, principal we actually for, your an

it. Got

second That's more topics. hot is question helpful. a of And address then little bit if some the you Okay. please could my

those like consumption. context total XXX,XXX And of Can are in then USD the million put any be comments the in the the and that that rebar context that centers it is you roughly was a data tons infrastructure, mentioned there cadence of You X in or past market would of what XXX,XXX, the years? of helpful. right on numbers? on also, And

Yes.

number context So there data have what a is the is something was information don't on on And in you tell I need front feet the me is of million-ton of square can much in right data X of past. I million XXX And market. in lower. are the But it comment it the centers. today, like in -- centers, rebar to where

the a dramatic side. in center on there's So the need been data increase

kind On that. that we've of that be be And are some are they're to come last seeing definitely or spending -- the data Dodge had the state all to all is of the infrastructure and coming in increases kind they as that indicators, to through whether escalate too, indicate starting DOTs, side, it past, a seeing should kind the it again, important all we we strong that see basis. quarter through. continuing consequence all of they key are -- said conversations duration anecdotal the show through too, the year-over-year the the the We this come budgets, the through. said Index But IIJA with on that absolutely now the Momentum of it very program. a know understood spending we've and money have of the increasing over also that we It's whether spending

million-ton So and than be will out, than higher year, through think it incremental And we've on just again a that's tons, past, to said again, grow XXXX level XXXX be and on should at million level X.X it X incremental XXXX. number. tons a start come back XXXX to a as at should that in we then per will your higher question the

infrastructure specifically But got of -- in Contrast to tailwind how this be that specifically that will we as starts this just projection If data, for up look is long There versus not is to start then these with will nature That increase it few be, year color on Peter the year again, XX.X%. next consumption number. we Timna, XXXX into to look is at another the over starts indicators said, and X% then an their And that reiterates really projects next us year. will Dodge this area. anticipated the this of leading be which in be because number. really XXXX key completed an incredible years. X.X%, long-term continuing the that's completed XXXX. the PCA based and cement at really again, to a that's for highway. more in a little construction add X They've

that of impressive Dodge steel sort of is very see evolve time, forecast but more but so that current the in the And to starts over will period for it's the the year. ground

comes BMO Jancic Katja Capital question from Markets. with Next

America? remind the just on in can volumes you North seasonality First, what is -- typically us in

QX X% you, we're to given it's on the high from going saw. between XX% weather dramatic that Typically, the end to and conditions we got be of QX, usually this time more

of we range normal anticipate. the sort that's So

Okay. be emerging it's -- going said on I you meaningfully And When sequentially. group. I to then business maybe up know the

we look segment that think Now year? it when was $XX should in million at relative year, last about How EBITDA. last around to I

Yes. group I to that business we on-trend going an is expect mean, the We to -- emerging return performance.

bit kind it better we and again, us. as and some grow business we some But we should impacted the be be did And weather look kind last in and it delays as that of that EBITDA than shipments quarter, XX% said, of little to conditions margin, expect including to So XX% a also return we the year. to was had we in forward, organically. what something that should outside at should would U.S. going it

BNP comes with The Gresser from next Tristan Paribas. question

I have X. So

the the noise, that The believe lot I at that's imports Mexico. first couple Senators years, one when we probably of and mean deal been return rebar past on is imports is look to and the from Mexico, them on as surged over a from tariffs put have products, I coming there's to one Mexico. that of a the

likely we're also you how situation there. And going bit get you first So a question. can my some trade think discuss the What actions happened? That's do there? to

absolutely. Yes,

So are the of recently Cotton to levels is [ Brown there. kind lines introduced of the ]. early Section of USMCA. bill of see and happens XXX you're to restore that what days the there and by tariffs objective kind to a the And along Senators right, exemption was the bill It's

U.S. it it's we'll to to yes, it have into an that. early would days, because and be been So monitor one. increase the merchant impact watch have that But would and both But rebar bar continue -- an there shipments have we'll in

from market being an aggressive prices. anywhere in up Mexican production, the the But issue Has producer have more you it for noticed right. operate? All you behavior on ramping you been

right? But in areas, a been factor had be decline a of definitely in in remember, kind time, from of are factor So we've of them. at same we -- less we the would a the We're say, other to the the of quarters. quarter, imports imports expect some less general, of coming have aware and them I in the

yes, ultimate ultimate the can of outcome be. see say we the will So it, or but it's what again, what hard that impact to

of risk we infrastructure. just helpful. on talking broken That's right. infrastructure a the a and like record, another were at Maybe sounding mean, about I bit one All

I think touch a I year delays. ago, has bit. you'd if wondering little consistent there a was And been

delays little driven think I the situation. a were by the political also bit

see now could the share thought be situation, to add more change U.S. administration, end some that It's But think case, the no year. to I you the supply mean, the and would as true at of of in that bit look if growth I supply we're situation, XXXX, essentially. at looking we see supply election, XXXX delays, demand this if still, political worried you a that's if So quite towards there like I'm hear we with because if the between mismatch change you. mismatch our the capacity could a and year. the again, a up a could or getting during could ramping some bit we close

over some we've our if to And with the in what that period. projects phase. until quarters, Tristan, phase we're there's these And last the said concerned several through spend predesign think And a about the about what thank of they you a for design question. conversations the There's you get to we've not have been led whole go delays. the right? that through, can of to it questions. these our the in one to -- But is told in sometimes coming probably and so this I predesign through. we my believe we overambitious earlier was thought going response see take we were today, And of referenced phases as to probably were come seeing are we it years, initial when timing

current spending. the Republican seen And I any we not is other a we come spending political or we through. either And was that as the from when it It at side. so bipartisan wavering look would approved. the we situation, thing infrastructure kind have both the parties And the the believe say of bill that Democratic are supportive of that was seeing are on that

to remain on between there's we the point bullish So on capacity pick or your that we're very on actually -- the there capacity but believe on some capacity. will comfortable that. that's that is market capacity of that the going estimates the And And yes, indicated capacity is a built. built capacity, get coming, can announced actually and to much that difference capacity just that how we our with maybe up gets manage kind

remain bullish. kind I it's backdrop change is The spend prepared what in we for, overall, position a come. it's and put it's been, a demand think, -- in to years a we're from my remarks, that as said So very us good multiyear generational is, going to of I

XXXX, that's correct. Tristan, I'll see we'll to in add online some necessarily don't your with respect think that come I comment just capacity

into time think others to time at for ramp-up a the at at new true online. line I look any we're we capacity marketplace, beyond projects you if think looking of mills, with and our stage the from 'XX this associated commissioning come look of the product the I and to associated the

Gibbs The Markets. with from next question comes Capital KeyBanc Phil

and complete these you projects? some Just of as CapEx for curious 'XX fiscal cadence on the second half

process the that ramp civil that is see of of CapEx the into driving to year going construction is We pretty as the then we months. consistent up Bill, continue which work QX We're West to most complete into at Virginia. QX. increased spend our at generally, and over site, certainly anticipate year. relatively And CapEx we summer slow start sort year our after and

will year-to-date, anticipate X QX where the QX that are pretty we we those and evenly our guidance achieve between given months. So

And to how that? about should as projects, think complete into you we 'XX look those

Yes, that should on equal anticipate be million we to there Virginia West left probably $XXX spend for year. the this

just QX? you're we How know the is you've short being start-up some through should bit then term. great, mill, your on here said of like And in and on of MBQ, a maybe more rebar about the initial which think you teething the I measured sounds QX start-up costs costs in and issues the gotten little

rebar, crossed in we're on in we've good on of bridge so terms largely Well, I commissioning. shape rebar. the mean

We've just think to I MBQ kind really that. families is kind develop good side. already, of continue about we'll had to product success So on of the this continuing and grow

be quarter. fourth be our to there on remarks, As we indicated in our to fiscal prepared still front in we the breakeven profitable expecting are EBITDA

ongoing we I going be off, those costs be see So be think and just it's this kind but smaller profitability. you'll we'll as of much trail will -- commissioning into to because numbers

probably is you peak costs quarter for this commissioning all? So and start-up

confidently and say Yes, that here. tail the we from QX will of that I can -- that this peak is say things year

and you than capital Okay. expected, year, the the outlook as letting that shipments but think you're have bills increase And might bit working in just on your have scrap of half net probably I been some heavier the balance back has a I little gone for down. first half also

activity. in of of you levels working but business So also a got higher things your favor, have couple you

So how side? about think we capital should working the

increase capital cost capital. quarter. the was around the million scrap comments, I second should from of mentioned that working driven strictly Phil, $XX as That during be invested, Yes, in my the working occurred

back. come in bit has quantity upcoming that play a third the We growth scrap other for a quarter. off offset in our off inventory construction in into anticipate the build most As anticipate receivable. -- is, the did of little second yes, to the And few coming accounts And we really do of factors -- that season. quarter should of we the

So I think X met. those will

we certainly, complete generation a in capital so working And as be here QX the and we that. would start year should

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

with for the like our the everyone joining we've I'd feel that to the that. results continuing to demand just we the thank today. that able really are to outlook and been construction We're pleased results from for about strongly for, products Okay. really Well, and call generate,

talking So future. thank very and CMC, to interest much the you in we in forward your you for look to

of many in speaking and call. with look you our call. us coming conference concludes to Thank on investor weeks. during for CMC forward days the We conference today's This you today's calls joining

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