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CMC Anticipates Second Quarter Loss
Mar. 15, 2010 Commercial Metals Co. has estimated it will record a net loss between $170 and $180 million ($1.50 to $1.60 per share) for the quarter ended February 28, 2010.
The company’s estimate includes a net loss of $130 to $140 million from continuing operations, which includes accruals for severance, lower-of-cost-or-market inventory valuation adjustments, job loss reserves, and LIFO expense estimated to be approximately $60 million total net after tax for the quarter.
CMC said that costs associated with the company’s announced exit from the joist and deck business — including impairment, severance, and other costs net of estimated asset realization values associated with the sale or closure of these facilities are — lead it to estimate second quarter operating results for joist and deck at approximately $40 million net after tax.
"Our second fiscal quarter ending February 28, which encompasses the winter months, is always our weakest quarter,” said CMC Chairman, President and CEO Murray R. McClean. “This second quarter has been particularly difficult due to a combination of continued weak end-use demand in the nonresidential construction markets, unusually harsh winter conditions in the U.S. and Europe, and rapidly rising ferrous scrap prices which have outpaced finished goods prices. Each of our segments will report operating losses for the second quarter with the exception of International Marketing and Distribution.
"Our balance sheet, capital resources and banking relationships remain strong,” continued McClean. “We will report upwards of $300 million of cash and short-term investments at February 28, 2010 without utilization of our domestic accounts receivable securitization program. Our greatest and most valuable asset in both difficult and prosperous times remains our employees, and I extend my thanks for their continued dedication."
CMC is scheduled to issue its comprehensive second quarter release, including its outlook for the third quarter, on Wednesday, March 24, 2010.
Commercial Metals Co. and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.