Commercial Metals Company (NYSE:CMC) Q4 2023 Earnings Call Transcript

Timna Tanners: Okay. And then so the $50 million, sorry, the additional CapEx guidance that you had for 2024, if you could just let us know what that was about?

Paul Lawrence: Yes. That’s just simply as we get more evolved into the timing of our planning process for the year and look at projects that can drive value to the organization. We’re now complete our planning process, whereas before it was more of an estimate based on where we were.

Timna Tanners: Okay, great. Thank you very much.

Paul Lawrence: Thank you, Timna.

Operator: [Operator Instructions] The next question is from Alex Hacking of Citi. Please go ahead.

Alexander Hacking: Yes. Thanks. Good morning everyone. Let me…

Paul Lawrence: Hey, Alex.

Alexander Hacking: [Indiscernible] time to Barbara for a tenured CEO, truly transformational. Not many people can say that. In terms of questions, I guess the first question, just following up on the infrastructure bill. I think you highlighted there the big ramp-up in design phase activity. How should we think about the lag there for steel going into the ground, right? That suggests to me probably we’re still maybe two or three years away. But any color there would be helpful? Thanks.

Paul Lawrence: No, I think – I don’t think it’s that long. I think we see – we believe that by the middle of next calendar year, we should start to feel some of that infrastructure spending coming through.

Alexander Hacking: Okay. Thanks. And then I guess a follow-up on merchant bar. Volumes down something like 10% year-over-year. Is that still decelerating in your view? Or has it kind of stabilized? And are there specific end markets within that at a particularly weak? Thanks.

Paul Lawrence: Alex, no, if you’ll recall in my comments, I made reference to a major planned outage that we had at one of our merchant mills. So we were within the quarter essentially constrained on production at our Alabama facility that is our flagship in terms of merchant bar. So it’s simply our capacity during the quarter. Underlying market conditions continue to be relatively strong in the merchant bar space.

Alexander Hacking: Okay. Thanks.

Barbara Smith: Thank you, Alex for your kind remarks.

Operator: At this time, there appears to be no further questions. Mr. Matt, I’ll now turn the call back over to you.

Peter Matt: Okay. Well, thank you, everyone, for joining our call today. CMC is a great platform to take advantage of the wave of construction, the spending that’s coming our way. And there’s clearly some short-term headwinds, but these will pass, and we expect materially higher through-the-cycle margins and significant value creation and demonstrating that we can achieve them. CMC is well positioned to capitalize on this performance and to strengthen and grow our business. Thank you very much for joining.

Operator: This concludes today’s CMC conference call. You may now disconnect.