With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are building materials, forest products, metals, and packaging.

Fortune Sector Leaders: Materials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

The steel and metal manufacturer focuses largely on purchasing, selling, and recycling scrap metal. Commercial Metals reported about $5.5 billion in revenue in fiscal 2020, a 6% drop from the year before, but saw a 41% rise in net income to $279 million.

This year's Fortune 500 marks the 66th running of the list.

A steel and metal manufacturer, Commercial's materials can be found in sports arenas, buildings, and bridges around the world.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Commercial Metals (CMC): Company Profile, Stock Price, News, Rankings

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Commercial Metals

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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. 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. 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 legislations and trade actions, U.S.

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 of Foley 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 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. 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.

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. 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 purpose only and is based on available information and certain assumptions and estimates that the company believes are reasonable. 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. Unless stated otherwise, all references made to year or quarter end are references to the company's fiscal year or fiscal quarter.

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's agreement to acquire Foley Products Company, after which we will cover our fourth quarter performance, fiscal 2025 strategic progress, and our outlook before opening the call to questions. To supplement today's commentary, we have posted two presentations to our IR website, one for the Foley acquisition and one detailing our fourth quarter and fiscal 2025 results. Starting with Foley, we are thrilled to add a best-in-class business with industry-leading margins to CMC's portfolio. In combination with our recently announced acquisition of CPMP, 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.

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 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. 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. 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 CPMP, creates immediate scale for CMC's precast platform. 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. 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. 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 CPMP.

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. 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. 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. As highlighted on slide nine, Foley and CPMP 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 - $30 million of EBITDA by year three, in addition to the $5 million - $10 million of EBITDA we originally identified for CPMP. 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. The expected improvement equates to roughly 35% - 40% of CPMP's forecasted 2025 EBITDA, consistent with our previous commentary that synergies would become more significant as our Precast platform gains scale. 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 10, we illustrate Foley's highly complementary proximity to both CMC and CPMP networks, which we believe will facilitate optimal coordination to achieve operational synergies and, over the longer term, substantial commercial opportunities. 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. 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. 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.

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 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. 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 CPMP will unlock further upsides as the cornerstones of our newly created precast 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?

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. The acquisition of Foley, in combination with CPMP, 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, increases margin levels and free cash flow capabilities, and importantly, should reduce earnings and cash flow volatility in our business. The sum of CPMP and Foley, representing our Precast platform, is expected to generate approximately $250 million of adjusted EBITDA in calendar 2025, before growth and synergies with EBITDA margins in excess of 34%. This compares to CMC's core EBITDA margin of 10.7% and the North America Steel Group adjusted EBITDA margin of 12.2% in fiscal 2025.

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 Emerging Businesses Group segment and Precast platform to over 32% of total operating segment adjusted EBITDA. 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. 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. Margin levels and normalized free cash flow conversion are both expected to increase meaningfully.

Based on Foley and CPMP's forecasted results for 2025, the addition of Foley and CPMP 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. In fiscal 2025 alone, the platform would have improved normalized free cash flow conversion by over four percentage points. Now I will cover the major terms related to the transaction. Total consideration will be paid at closing and is subject to customary working capital adjustments. This valuation represents a 10.3x multiple on Foley's expected calendar 2025 EBITDA. Importantly, the effective multiple is reduced to approximately 9.2x when cash tax savings are considered, as CMC will benefit from a tax step-up on assets.

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. It's worth noting Foley's EBITDA margins are 5% - 10% higher than those of many blue-chip building product and construction material companies that routinely trade at 10 - 16 times forward EBITDA. 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 CPMP 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.

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 2.7x trailing 12-month adjusted combined 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, as we did with the highly successful acquisition of Gerdau's 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. 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.

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.

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 against this objective along three paths. First, by investing in our people and pursuing excellence in all we do. Second, by investing in value-accretive organic growth. 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. 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.

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. 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. 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. 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. 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 $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. 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. 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 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. 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 West Virginia under the 48C program, which we will realize in fiscal 2026 and effectively reduces our capital investment in this project.

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

Downstream bid volumes, our 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. 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, or DMI, as well as recent conversations with many of our largest customers. The DMI leads construction activity by 12 - 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 experience a large inflow of projects into the pipeline related to energy generation, reshoring, 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 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. housing shortage of 2 - 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. Commencement of even a handful of related mega projects 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.

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. 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, 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. 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.

The petition alleges 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%. 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. 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.

One attractive element of the Emerging Businesses Group 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. 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 Chromax all increased from the prior year. We have outlined the unique capabilities of these products on prior calls, and we continue to expect that they, along with the Emerging Businesses Group'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. 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 mark in over two years, aided by an improved price environment for Merchant Bar and Wire Rod. The green shoots that we have noted on recent earnings calls continue to mature. We are encouraged by recent developments that 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, 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 for 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?

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. 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. These adjustments consisted of a $3.8 million 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. 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.

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, impacting consolidated adjusted earnings, adjusted earnings per diluted share, adjusted EBITDA, core EBITDA, and core EBITDA margin, as well as North America Steel Group adjusted segment EBITDA. Given the prominence of these metrics, we have published recast quarterly figures dating back to fiscal 2019 in 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. 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. Slide 14 of the supplemental presentation illustrates the year-to-year changes in CMC's quarterly financial performance.

Segment-level adjusted EBITDA increased by $87.4 million in total, with our North America Steel Group contributing $36.6 million of improvement, Emerging Businesses Group providing $8.1 million, and the Europe Steel Group delivering $42.7 million. The consolidated core EBITDA margin of 13.8% compared to 11% in the prior year period. CMC's North America Steel Group generated adjusted EBITDA of $239.4 million for the quarter, equal to $207 per ton of finished steel shipped. 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, alloy consumption reduction, process yield improvements, and logistics optimization. North America Steel Group adjusted EBITDA margin of 14.8% compares to 13% in the fourth quarter of 2024.

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. As indicated earlier, demand for long steel products was resilient during the quarter. Finished steel shipments increased by 3% compared to a year ago, while rebar shipments from CMC's mills and downstream operations grew at a similar rate. The Emerging Businesses Group fourth quarter net sales of $221.8 million increased by 13.4% on a year-over-year basis, while adjusted EBITDA of $50.6 million increased by 19.1%.

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. 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. Segment-adjusted EBITDA margin of 14.8% increased from -1.6% 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. Excluding this, operational results improved by $11.7 million, driven by higher margins, a 17% 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. 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. CMC's effective tax rate was 21.5% in the fourth quarter and 21.3% for the full year. Looking ahead, we anticipate a full-year effective tax rate between 4% 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 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 CPMP, which will significantly increase our free cash flow generation. 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 micromill, as well as a handful of high-return growth investments within our Emerging Businesses Group segment. This concludes my remarks, and I'll now turn it back to Peter for additional comments on CMC's 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. 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. 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 CO2 credit in an amount of approximately $15 million during the first quarter. Excluding this credit, adjusted EBITDA for our Europe Steel Group is likely to be around breakeven as seasonal factors and scheduled maintenance 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 return on capital. 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. 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. 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.

Thank you. 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. 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. Your first question today will come from Mike Harris with Goldman Sachs. Please go ahead.

Hi, good morning. This is Cecilia 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.

Yeah, thank you very much for the question, Cecilia. Infrastructure has been very strong. It has been for the past several years, really on the back of the IIJA, and we expect it's going to continue to be strong. I would say that we expect there to be a follow-on bill so that this should be a multi-year trend. 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. Data centers, obviously very strong. Institutional spending on hospitals, that type of thing has been also very strong. There have been other areas that are kind of weaker, and I'm thinking about kind of commercial buildings, retail has been weaker. The thing that's exciting about the non-residential space is that there is a huge backlog of potential projects coming down the pike.

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. There is still a huge pipeline of potential projects that come behind that in some of these trade deals if and when they get negotiated. We're very bullish about a turn in non-residential spending, and we'll see that move from kind of what's been flattish to something that's growing again. Lastly, residential markets. You know, residential markets have been lackluster, I would say, and a lot of that is tied to interest rates. Those markets tend to be more sensitive to interest rates. As we see interest rates start to come down, we have confidence that we're going to see a turn in that market. Remember that we have a deficit of 2 - 4 million homes in this country.

There is absolutely a demand backdrop that warrants the residential spending, and we just have to get to a place where the economics support that. We think we're going to see that as rates continue to drift down. In total, we remain very bullish about the level of spending over the next several years. Each of these sectors, it's a multi-year trend.

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?

Cecilia, 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. We often measure the North America Steel Group as an 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. 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. North America Steel Group will have a great quarter. However, if we look at our Europe Steel Group, two aspects to that. We talked about the reduction in the CO2 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 $15 million impact. We have our typical seasonal planned maintenance outage that will reduce the operating performance, excluding the CO2 credits to near breakeven. The other piece is within the EBG group, because TENSAR 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. As we guided towards improvement over last year, but you know a similar type of transition from fourth quarter to first quarter, those are the major factors which drive us towards a fairly consistent overall quarter over quarter, but many different moving pieces within the portfolio.

Your next question today will come from Sathish Kasinathan with Bank of America. Please go ahead.

Yeah, hi, good morning, Peter and Paul. Congrats on a strong quarter and the announced acquisition.

Foley and CPMP now, I mean, I think you now have a strong scale in the precast concrete market. 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?

Yeah, 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 have quite a bit of integration to do with these transactions, and we're very happy with the platform that we've built. As we look a little bit further forward, once we bring our leverage down into our acceptable range, we would start to look at other transactions. We think this is a big market. Again, precast overall, as we said on the last call when we introduced CPMP, this is a $30 billion market, and it's fragmented, and we think there are 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 they strengthen our core, which is kind of part of the message that we are consistently trying to reinforce. 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. Again, to do that, we're going to build a platform that's several hundred million dollars of EBITDA, but we're going to do it on a measured basis. Remember, 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 integrating these assets successfully is absolutely critical to ensuring the success of that going forward. Very excited about the opportunity, and these two businesses could not fit together better.

Anyway, super excited about what we have so far.

Sathish, 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. The one thing that came up repeatedly was these are the two leaders in the space. 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 tried to build the portfolio that made sense.

Yeah, that's great to hear. Just on Foley, it is clear that the margin profile is one of the best today, but can you maybe share the historical growth rate for Foley over the past two, three years? Looking ahead, do you see potential for this business to continue to grow, gain market share, and grow above the 5% - 7% market growth?

I think, you know, if you look at the growth 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. Then on top of that, there's growth related to kind of share expansions that the business makes. In the case of Foley, it has a number of expansions that it's in progress on in its territories today that will provide opportunities for future growth. We would expect to grow at a level in excess of GDP over the next couple of years from a volume standpoint.

I would just add, Sathish, the margin level that we describe in the material, the business has generated that consistently over the last handful of years. It is a very consistent performer.

Okay, thank you. I'll jump back in the queue. Thank you.

Your next question today will come from Alex Hacking with Citi. Please go ahead.

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 CPMP. 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 CPMP from learning from Foley? Thanks.

Yeah, thanks, Alex. Appreciate the question. A couple of things that I would point to. Again, I think as we look at these businesses, one of the things we really like about this is, and 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 Foley does really well, and there are certain things that CPMP does really well.

I think the combination of those two companies is going to build a really formidable company in our portfolio. If we look at Foley specifically relative to CPMP and try to articulate the margin differentials, one of the things, Foley has a different operating model than CPMP, and that's a factor. The other thing that I would say on the CPMP side is that CPMP has made a number of acquisitions recently where they are kind of works in process, or works in progress. As a consequence, the margins in some of those businesses are lower, and they bring down the overall margin. If you look at precast in general, it is the case that Foley's margins stand out. CPMP does, if you look at the plants that are kind of the more mature plants, they have very attractive margins there as well.

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? Thank you.

For precast, the maintenance CapEx on these businesses is much lower. We talked about, in the case of CPMP, you may remember we talked about $8 million - $10 million of maintenance CapEx. In the case of Foley, it's probably like a kind of $10 million - $15 million type of number. In the case of CPMP, 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.

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. Again, all of that CapEx beyond maintenance is maintenance or is spending that has very attractive returns tied to it.

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

Your next question today will come from Carlos de Alba with Morgan Stanley. Please go ahead.

Thank you very much. Good morning. Maybe a follow-up on the prior question. How quickly do you think that the margins in CPMP, and particularly in those recent acquisitions, could bring up or come to the levels that Foley and maybe the core CPMP business is already experiencing? Is it already in the next year or two years?

Great question, Carlos. The one thing I'd say is, you know, we want to be a little careful. We don't own these businesses yet. We need to close on the transactions and better understand what we have, and with that understanding will come more clarity on the timeframe. I think the appropriate way to frame it for you at this juncture is that we talk about the synergies as being achievable over a three to five-year horizon. I think that that's the right horizon to think about for any kind of improvement in the CPMP margins. Obviously, there are some things that will come quick, and then there are other things that will take longer.

I just mentioned before in response to Alex's question that we're going to put some extra capital into, to the tune of kind of $5 million per year into CPMP, and that will be to accelerate some of that. Again, that's all really high-return capital that we'll be deploying.

All right. The $5 million - $10 million incremental EBITDA in CPMP that you mentioned, that includes this recent acquisition by the company stepping up the EBITDA generation, right?

No, just to be clear, when we announced CPMP, we said that there was $5 million - $10 million in that transaction. We maintain that, right? In this transaction, we're bringing another $25 million - $30 million over a three to five-year period. That is why, and you'll remember in the last conversation that we had when we acquired or when we announced the acquisition of CPMP, we said that, you know, as we have a platform, we would have more synergies with successive moves. This is a great example of this. Honestly, you might ask the question about the timing of these two transactions, and obviously we couldn't call the timing. I think when you see that magnitude of synergies, it makes it clear why this was a transaction we had to look at seriously. It's an extra $25 million - $30 million in this transaction.

All right, fair enough. My second question is regarding the outlook for dividends and buybacks vis-à-vis the cash flow generation of the company. You did mention that the acquisitions of both of them are going to be accretive to free cash flow. You're not going to really pay a lot of cash taxes in the next two years. How do you see dividends and buybacks in the coming quarters?

Let me just say to answer your question directly, on dividends, we have no plan to change our dividend, zero plan to change our dividend. 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 are going to focus on big acquisitions for now, and we are going to focus on integration and making sure that we make these transactions highly successful and great return investments for our business. We will continue the organic growth projects that we've started across the company. As we move past Steel West Virginia, these will be much more capital-light investments, but we will continue those.

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 two times target. Once we get to the two times target or below, we'll 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.

You are very confident in both the numerator and the denominator in terms of being able to bring that leverage down. In terms of the cash flow and the lack of U.S. cash taxes, the reduction in CapEx going forward, and the optimism in the current environment in our business, cash flow generation is expected to be very strong. That also is helping the EBITDA that we expect the business to generate over the coming periods, which is also expected to be strong. Therefore, both aspects should help us achieve that 2x net leverage over the coming quarters.

Your next question today will come from Bill Peterson with JPMorgan. Please go ahead.

Yeah, hi, good morning. Thanks for taking the questions, and congrats on the second transaction here in a few months. Along those lines, I have a longer-term question, maybe more suited for a capital markets day, but 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, ground stabilization, precast, or other materials. Given the margin structure in these newer businesses and acquired 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.

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. If you think about our rebar business, our fabrication business, these fit perfectly, and these are early-stage construction suppliers. You think about our Tensar business, it's early-stage construction. Think about our recently acquired precast platforms, early-stage construction, PRS, Performance Reinforcing Steel, early-stage construction, and Construction Services, same thing. 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.

When 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 footprint, and that's going to mean several hundred million dollars of EBITDA. With these two transactions, we're well on the way to doing that. With the footprint that Foley 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 mills business, right? There's a very natural path that we're following. As we look at our other EBG businesses, we would love to grow Tensar. We think that has great potential, and it's still a very underpenetrated market. It will be an important piece of our portfolio.

Performance Reinforcing Steel, the plant that we have today is sold out, so we're building another one. We believe that the demand for kind of corrosion-resistant steel in this country, given some of the changes in weather and so forth, is only going to increase. Construction Services is a tremendous asset. We talk to customers, and the customers tell us the Construction Services business where we are, and it's really a small segment of our footprint, which is really Texas, Louisiana, and Oklahoma, it's a great asset to the customers we have. That's something that we're looking at as a potential way to kind of complement the early-stage construction portfolio that we're building. 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 good returns on invested capital. I want to just come back, sorry, this is a long answer, but I think this is important. I want to come back to our steel business and TAG. The whole mission of TAG is to improve the great platform that we already have in steel. It is so critical when we talk to the customers, and I'm talking about big contractors, they tell us, you know, 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, and you do it when you say you're going to do it. TAG is helping us make that business even better.

Our goal with that business is to raise the margins through the cycle so that they start to look like the margins in some of our, you know, ultimately some of our EBG businesses. It's a multi-year 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. Anyway, Bill, I know that's a long answer to your question, but hopefully it gives you some color.

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

You talked about, you know, typical seasonality across several of these sectors. I guess on North America, if we look back, this would imply something like a down 3% - 7% quarter on quarter. We've seen a lot of variability over the last five years or so. I would assume you're really talking more driven by the downstream versus products. Can you unpack what typical seasonality is really meant here and what that may look like for the various, you know, subsectors, subsegments of your business?

Yeah, Bill, the season, September through November, really, it is a good construction season, similar to our fourth quarter, with the exception of the week that we lose for Thanksgiving. We see it's usually that 2% - 3% reduction in volumes that we see in the first quarter on the North America Steel Group. As I said 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 EBG business. That one is a little bit more seasonal, as you saw last year. Europe, with the outage, it's less seasonal, but the outage season.

Yeah, thanks for that, Paul. Thanks for all the details. Appreciate it.

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

Hi, James. I just want 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, you know, relatively high capital costs. Could you give us some idea in terms of how to sort of quantify those? When you talk about the steep learning curve, 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 a much lower margin than we're seeing in these numbers. Thanks.

Yeah. If we look at what drives this business, it starts with customer relationships, right? If you look across the portfolio of CPMP or Foley, they've got great relationships in the region that connect them, and obviously a reputation and the capability to service the jobs that they're getting. I think, obviously, reputation, just like in our rebar fabrication, it's critical that you deliver the products on time and that you deliver good quality products and that you help the contractor accelerate their job. Those are really important. The third leg of this is capability. When you look at the capabilities of both CPMP and of Foley, they bring a broad-based precast capability. You can be in the precast business pretty easily if you kind of have a concrete mixer and a mold.

The point is that most of these complicated job sites need a lot of different forms to serve the precast need. As a consequence, the capability that both of these companies have across the concrete pipe and precast fronts gives them a differentiating capability to perform in the market on these complicated jobs. The last thing I would say is, and this goes to the speed point, having some scale helps a lot on these larger jobs because what the contractors will tell you is when they start a project, they want to go fast. They don't want to wait for material. The party that can have the material available has a real advantage in supplying the product.

Commercial Metals (CMC) Q4 2025 Earnings Call Transcript

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