<PAGE> 1
FORM 1O-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 2O549
------------------------------------
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-------------------------------------------
For quarter ended November 30, 1999
Commission File Number 1-4304
COMMERCIAL METALS COMPANY
----------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-0725338
- ------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7800 Stemmons Freeway
Dallas, Texas 75247
----------------------------------------
( Address of principal executive offices )
( Zip Code )
(214) 689-4300
----------------------------------------------------
( Registrant's telephone number, including area code )
-----------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months ( or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
As of November 30, 1999 there were 14,374,095 shares of the Company's common
stock issued and outstanding excluding 1,758,488 shares held in the Company's
treasury.
<PAGE> 2
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - Financial Statements:
Consolidated Balance Sheets -
November 30, 1999 and August 31, 1999 2 - 3
Consolidated Statements of Earnings -
Three months ended
November 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Three months ended November 30, 1999 and 1998 5
Consolidated Statement of Stockholders' Equity
For the three months ended November 30, 1999 6
Notes to Consolidated Financial Statements 7 - 8
Management's Discussion and Analysis of the
Consolidated Financial Statements 9 - 15
PART II - Other Information and Signatures 16 - 17
</TABLE>
Page 1
<PAGE> 3
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
(In thousands except share data)
<TABLE>
<CAPTION>
November 30, August 31,
1999 1999
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 17,594 $ 44,665
Accounts receivable (less allowance for
collection losses of $7,939 and $7,714) 331,963 304,318
Inventories 245,595 249,688
Other 64,894 63,666
----------- -----------
TOTAL CURRENT ASSETS 660,046 662,337
PROPERTY, PLANT, AND EQUIPMENT, at cost:
Land 26,098 25,927
Buildings 89,377 87,796
Equipment 642,942 635,054
Leasehold improvements 30,340 30,119
Construction in process 21,625 25,351
----------- -----------
810,382 804,247
Less accumulated depreciation
and amortization (411,335) (401,975)
----------- -----------
399,047 402,272
OTHER ASSETS 15,694 14,379
----------- -----------
$ 1,074,787 $ 1,078,988
=========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 2
<PAGE> 4
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
(In thousands except share data)
<TABLE>
<CAPTION>
November 30, August 31,
1999 1999
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Commercial paper $ 15,000 $ 10,000
Notes payable 17,453 4,382
Accounts payable 186,742 191,508
Other payables and accrued expenses 131,232 153,889
Income taxes payable 2,775 2,025
Current maturities of long-term debt 7,726 9,873
----------- -----------
TOTAL CURRENT LIABILITIES 360,928 371,677
DEFERRED INCOME TAXES 23,263 23,263
LONG-TERM DEBT 265,181 265,590
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Capital stock:
Preferred stock -- --
Common stock, par value $5.00 a share;
authorized 40,000,000 shares; issued
16,132,583 shares, outstanding
14,374,095 and 14,406,260 shares 80,663 80,663
Additional paid-in capital 14,087 14,131
Cumulative translation adjustment (889) (774)
Retained earnings 376,538 368,177
----------- -----------
470,399 462,197
Less treasury stock,
1,758,488 and 1,726,323 shares at cost (44,984) (43,739)
----------- -----------
425,415 418,458
----------- -----------
$ 1,074,787 $ 1,078,988
=========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 5
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
-----------------------------------
(In thousands except share data)
<TABLE>
<CAPTION>
Three months ended
November 30,
-----------------------
1999 1998
--------- ----------
<S> <C> <C>
NET SALES $ 612,427 $ 548,831
COSTS AND EXPENSES:
Cost of goods sold 534,993 475,056
Selling, general and
administrative expenses 51,132 46,518
Interest expense 5,824 4,911
Employees' retirement plans 4,170 4,798
----------- -----------
596,119 531,283
----------- -----------
EARNINGS BEFORE INCOME TAXES 16,308 17,548
INCOME TAXES 6,075 6,537
----------- -----------
NET EARNINGS $ 10,233 $ 11,011
=========== ===========
Basic earnings per share $ 0.71 $ 0.76
Diluted earnings per share $ 0.70 $ 0.75
Cash dividends per share $ 0.13 $ 0.13
Average basic shares outstanding 14,388,037 14,578,065
Average diluted shares outstanding 14,638,104 14,660,851
</TABLE>
See notes to consolidated financial statements.
Page 4
<PAGE> 6
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(In thousands)
<TABLE>
<CAPTION>
Three months ended
November 30,
-----------------------
1999 1998
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 10,233 $ 11,011
Adjustments to earnings not requiring cash:
Depreciation and amortization 16,345 11,853
Provision for losses on receivables 134 378
Other (394) (26)
-------- --------
Cash flows from operations before changes in
current assets and liabilities 26,318 23,216
Changes in current assets and liabilities:
Decrease (increase) in receivables (27,779) 7,275
Decrease (increase) in inventories 4,093 (18,404)
Decrease (increase) in other assets (4,092) 7,836
Increase (decrease) in accounts payable,
accrued expenses and income taxes (26,673) (30,485)
-------- --------
Net Cash Used by Operating Activities (28,133) (10,562)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (11,686) (51,801)
Sales of property, plant and equipment 394 26
-------- --------
Net Cash Used by Investing Activities (11,292) (51,775)
CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper - net change 5,000 10,000
Notes payable - net change 13,071 38,290
Payments on long-term debt (2,556) (1,384)
Stock issued under stock option and purchase plans 1,002 182
Treasury stock acquired (2,291)
Dividends paid (1,872) (1,894)
-------- --------
Net Cash Provided by Financing Activities 12,354 45,194
Increase (Decrease) in Cash and Cash Equivalents (27,071) (17,143)
Cash and Cash Equivalents at Beginning of Year 44,665 30,985
-------- --------
Cash and Cash Equivalents at End of Period $ 17,594 $ 13,842
======== ========
</TABLE>
See notes to consolidated financial statements.
Page 5
<PAGE> 7
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------
(In thousands except share data)
<TABLE>
<CAPTION>
Common Stock Accumulated
---------------------------------- Other Add'l
Number of Comprehensive Paid-In Retained
Shares Amount Loss Capital Earnings
-------------- ----------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance September 1, 1999 16,132,583 $80,663 ($774) $14,131 $368,177
Comprehensive Income:
Net earnings for three months
ended November 30, 1999 10,233
Other comprehensive income-
Foreign currency translation adjustment
net of taxes of $68 (115)
Comprehensive income
Cash dividends - $.13 a share (1,872)
Treasury stock acquired
Stock issued under stock option,
purchase and bonus plans (44)
---------- ---------- ---------- ---------- ----------
Balance, November 30, 1999 16,132,583 $80,663 ($889) $14,087 $376,538
========== ========== ========== ========== ==========
<CAPTION>
Treasury Stock
--------------------------------
Number of
Shares Amount Total
----------- ---------- ----------
<S> <C> <C> <C>
Balance September 1, 1999 (1,726,323) ($43,739) $418,458
Comprehensive Income:
Net earnings for three months
ended November 30, 1999 10,233
Other comprehensive income-
Foreign currency translation adjustment
net of taxes of $68 (115)
----------
Comprehensive income 10,118
Cash dividends - $.13 a share (1,872)
Treasury stock acquired (73,800) (2,291) (2,291)
Stock issued under stock option,
purchase and bonus plans 41,635 1,046 1,002
---------- --------- ---------
Balance, November 30, 1999 (1,758,488) ($44,984) $425,415
========== ========= =========
</TABLE>
See notes to consolidated financial statements.
Page 6
<PAGE> 8
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
NOTE A - LONG-TERM DEBT AND EQUITY (in thousands):
<TABLE>
<CAPTION>
Total
Long-Term Current Amount
Debt Maturities Outstanding
--------- ---------- -----------
<S> <C> <C> <C>
6.75% notes due 2009 $100,000 $ -- $100,000
7.20% notes due 2005 100,000 -- 100,000
6.80% notes due 2007 50,000 -- 50,000
8.49% notes due 2001 14,285 7,143 21,428
Other 896 583 1,479
-------- -------- --------
$265,181 $ 7,726 $272,907
======== ======== ========
</TABLE>
NOTE B - QUARTERLY FINANCIAL DATA:
In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
November 30, 1999, the results of operations for the three months then ended and
the cash flows for the three months. The results of operations for the three
month periods are not necessarily indicative of the results to be expected for a
full year.
NOTE C - RECLASSIFICATIONS:
Certain reclassifications have been made in the 1999 financial
statements to conform to the classifications used in the current year.
NOTE D - EARNINGS PER SHARE:
There were no adjustments to net earnings to arrive at net income for
either the three months ended November 30, 1999 or 1998. The reconciliation of
the denominators of the earnings per share calculations are as follows:
<TABLE>
<CAPTION>
Three months ended November 30,
1999 1998
---------------------------------
<S> <C> <C>
Shares outstanding for basic earnings per share 14,388,037 14,578,065
Effect of dilutive securities - Stock options/purchase plans 250,067 82,786
Shares outstanding for dilutive earnings per share 14,638,104 14,660,851
</TABLE>
There were no stock options at November 30, 1999 which were anti-dilutive
based on the average share price for the quarter of $31.00 per share.
NOTE E - ACCOUNTING FOR COSTS OF COMPUTER SOFTWARE:
Effective September 1, 1999, the Company adopted Statement of Position
(SOP) No. 98-1, "Accounting for the Cost of Computer Software Developed or
Obtained for Internal Use". This SOP requires capitalization of certain
internal-use software costs once specific criteria are met. The adoption of this
SOP did not have a significant impact on the Company's consolidated financial
position or results of operations.
Page 7
<PAGE> 9
COMMERCIAL METALS COMPANY AND SUBSIDIARIES
------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
NOTE F - BUSINESS SEGMENTS (in thousands):
The following is a summary of certain financial information by
reportable segment:
<TABLE>
<CAPTION>
Three months ended November 30, 1999
----------------------------------------------------------------
MANU- MARKETING CORP CONSOL-
FACTURING RECYCLING & TRADING & ELIM IDATED
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net sales-unaffiliated customers $ 311,730 $ 97,855 $ 202,834 $ 8 $ 612,427
Intersegment sales 1,143 4,307 5,248 (10,698)
---------- ---------- ---------- ---------- ----------
312,873 102,162 208,082 (10,690) 612,427
Earnings (Loss) before income taxes 17,700 585 3,831 (5,808) 16,308
Total assets 712,651 116,957 215,183 29,996 1,074,787
</TABLE>
<TABLE>
<CAPTION>
Three months ended November 30, 1998
----------------------------------------------------------------
MANU- MARKETING CORP CONSOL-
FACTURING RECYCLING & TRADING & ELIM IDATED
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net sales-unaffiliated customers $ 303,224 $ 73,144 $ 172,454 $ 9 $ 548,831
Intersegment sales 862 5,431 11,710 (18,003)
---------- ---------- ---------- ---------- ----------
304,086 78,575 184,164 (17,994) 548,831
Earnings (Loss) before income taxes 23,591 (4,129) 3,856 (5,770) 17,548
Total assets 663,309 110,540 235,873 19,943 1,029,665
</TABLE>
Page 8
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED RESULTS OF OPERATIONS
(in millions)
<TABLE>
<CAPTION>
First Quarter
-----------------------
2000 1999
---- ----
<S> <C> <C>
Net sales $ 612 $ 549
Net earnings 10.2 11.0
Cash flows 26.3 23.2
EBITDA 38.5 34.3
LIFO reserve 3.6 19.4
</TABLE>
SIGNIFICANT EVENTS AFFECTING THE COMPANY THIS QUARTER:
- - Strong first quarter against prior year record.
- - Last year's first quarter included after-tax income of $1.8 million from a
graphite electrode litigation settlement.
- - Strong steel fabrication and record copper tube profitability sustained the
Manufacturing Segment in spite of significant losses incurred on several
large structural fabrication contracts.
- - Steel minimill operating profits declined from the prior year period due to
ramp up of new production lines and equipment, steel imports and
installation of a new ladle metallurgical station at the South Carolina
mill.
- - SMI Texas received insurance proceeds of $1.2 million, after-tax, for
transformer downtime.
- - The Recycling segment was profitable (compared with a substantial loss the
prior year period) on much improved market conditions.
- - The Marketing and Trading segment operating income was modestly lower than
the prior year period, on higher sales.
Page 9
<PAGE> 11
CONSOLIDATED DATA
The LIFO method of inventory valuation decreased net earnings for the quarter
$385 thousand (3 cents per diluted share) compared to an increase of $2.0
million (14 cents per diluted share) last year.
SEGMENT OPERATING DATA
(in thousands)
Net sales and operating profit (loss) by business segment are shown in the
following table:
<TABLE>
<CAPTION>
Three months ended
November 30,
---------------------------
1999 1998
--------- ---------
<S> <C> <C>
NET SALES:
Manufacturing $ 312,873 $ 304,086
Recycling 102,162 78,575
Marketing and Trading 208,082 184,164
Corporate and Elimination (10,690) (17,994)
--------- ---------
$ 612,427 $ 548,831
========= =========
OPERATING PROFIT (LOSS):
Manufacturing $ 17,720 $ 23,593
Recycling 595 (4,123)
Marketing and Trading 4,335 4,649
Corporate and Elimination (518) (1,660)
--------- ---------
$ 22,132 $ 22,459
========= =========
</TABLE>
MANUFACTURING -
The Company's Manufacturing segment consists of the Steel Group and the Copper
Tube Division. Operating profit for the segment decreased 25% from last year's
first quarter while net sales increased 3%. The Steel Group's operating profit
was 38% below last year's first quarter. This was partially offset by
significantly better operating profit for the Copper Tube Division. Continuing
historically high levels of low-priced steel imports resulted in lower mill
selling prices in major product lines, although the underlying demand for steel
products was healthy. Also, margins were pressured by higher raw material costs.
Page 10
<PAGE> 12
Steel and scrap prices are as reflected in the table below:
<TABLE>
<CAPTION>
Three months ended
November 30,
------------------
1999 1998
---- ----
<S> <C> <C>
Average mill selling price $303 $311
Average fab selling price 668 675
Average scrap purchase price 85 81
</TABLE>
Operating profit for the Company's four steel minimills was 51% below the prior
year period. Mill shipments declined 1% to 416,000 tons from 419,000 tons while
tons rolled were up 3% from last year because of the new rolling mill at SMI
South Carolina. Tons melted, however, significantly decreased due to imports and
equipment outages at SMI South Carolina. During October 1999, the South Carolina
mill installed a new ladle metallurgical station in the melt shop which resulted
in downtime. Margins were lower due to higher scrap prices. While the average
mill selling price was $8 per ton below last year, average scrap purchase costs
were higher by $4 per ton. The SMI Texas mill recovered $1.2 million after-tax
for insurance relating to previously incurred transformer problems.
Net sales and operating profit in the fabrication businesses were comparable
with the prior year's strong first quarter in spite of losses on several large
structural steel jobs and the adverse outcome of $800,000 for litigation
relating to a large structural job. Fabricated steel shipments totaled 216,000
tons, a 5% increase from the prior year period. The average fab selling price
decreased $7 per ton, partially because of product mix.
Depreciation and amortization expense for the Steel Group increased by $4.1
million pretax from the prior year first quarter due to the new rolling mill in
South Carolina and new finishing line at SMI Alabama. The Company's interest
expense increased by $913,000 from the prior year primarily because the
completion of these two projects by fiscal year end 1999 substantially ended
capitalization.
The Copper Tube Division's operating profit more than doubled from the same
period last year due to better material spreads. Net sales increased by 38%.
Demand for plumbing and refrigeration tube continued to be buoyed by the strong
housing sector in the first quarter 2000. Copper tube shipments increased 15%
versus the first quarter last year, and production was 14% higher.
Page 11
<PAGE> 13
RECYCLING -
The Recycling segment reported an operating profit of $595,000 for the first
quarter 2000, which represented its second consecutive profitable quarter and a
substantial improvement from the prior year period loss of $4,123,000. Market
conditions continued to improve, with sales up 30% to $102 million. Ferrous
scrap tonnage processed and shipped increased 8%, and ferrous sales prices were
an average $103 per ton or 18% higher than a year ago. Nonferrous shipments
increased 17%, and the average nonferrous scrap price was 13% higher than the
prior year period. Total volume of scrap processed, including the Steel Group
processing plants, was 557,000 tons, an increase of 12% from the 496,000 tons
processed during the prior year period.
MARKETING AND TRADING -
Operating income for the Marketing and Trading segment was 7% lower than the
prior year's first quarter, while net sales increased 13%. Global demand and
prices began to recover, but were still relatively weak during the first quarter
2000. Gross margins in steel marketing and distribution as well as steel trading
remained tight, and tonnage was affected by anti-dumping measures around the
world. The Company achieved further penetration in highly competitive markets
for nonferrous metal products and maintained profitability through product line
expansion. The industrial raw materials and products including ores, minerals,
ferrous raw materials and primary metals remained profitable despite the pricing
pressures. The segment continued to broaden in new product and geographic areas.
In September 1999, a subsidiary of the Company acquired a 25% ownership interest
in EuroPickling NV, a new pickling and oiling operation to be built in Belgium.
YEAR 2000 -
As described in its Form 10K report for the year ended August 31, 1999, the
Company had a comprehensive program to meet anticipated Year 2000 concerns. This
program was substantially completed by December 31, 1999. The Company has not
encountered any significant year 2000 problems. System conversion/modification
costs were minimal for the quarter ended November 30, 1999.
ENVIRONMENTAL ACTIVITIES
The Company is subject to federal, state and local pollution control laws and
regulations in all locations where it has operating facilities. It anticipates
that compliance with these laws and regulations will involve continuing capital
expenditures and operating costs.
Page 12
<PAGE> 14
In the ordinary course of conducting its business, the Company becomes involved
in environmental litigation, administrative proceedings, and governmental
investigations. Certain of these environmental matters or other proceedings may
result in fines, penalties or judgments against the Company which may have a
material impact on earnings for a particular quarter. While the Company is
unable to estimate precisely the ultimate dollar amount of exposure to losses in
connection with such matters, it makes timely accruals as warranted. It is the
opinion of the Company's management that the outcome of such proceedings,
individually or in the aggregate, will not have a material adverse effect on the
business or consolidated financial position of the Company.
OUTLOOK -
Management continues to believe that the second half fiscal year 2000 will be
stronger than the first half, due to both internal and external factors. The
Company's operating performance should improve during the year, and markets
should strengthen.
Demand from the construction, manufacturing and distribution sectors of the U.S.
economy generally remains strong, and markets in Europe and Asia are gaining
momentum. The Company's biggest challenge continues to be the adverse effect on
the pricing of steel bar products stemming from the unprecedented imports into
the U.S.
Because of the global pickup and potential, additional anti-dumping action in
the U.S., management anticipates modestly higher realized prices for steel mill
products, and improved manufacturing margins. Steel mill production and
shipments are expected to increase. The outlook for the Company's downstream
steel fabrication and related operations remains favorable, and its strong
presence in fabrication continues to provide profit stability. The new
castellated beam product line has good potential. Residential construction
remains robust; consequently, strong demand for copper tube is expected to
continue.
As the second quarter began, ferrous scrap prices were firming further while
nonferrous scrap prices were relatively stable. Domestic demand for scrap has
strengthened and export markets have improved. The remainder of fiscal year 2000
is likely to show even better results for the Recycling segment.
In Marketing and Trading, steel prices generally have rebounded off the bottom
with most of the improvement in flat rolled products. The segment's steel sales
into the U.S. are likely to decline, but sales elsewhere are rising. Sales of
other products should increase. The better worldwide demand and prices for steel
and nonferrous metals should be beneficial. Meanwhile, the segment continues to
capitalize on opportunities that have arisen from the dislocations around the
globe.
Page 13
<PAGE> 15
Longer term, good demand for construction related products and services is
expected to continue, and the added funding from the $217 billion Federal
transportation program has begun to materialize. The Company anticipates
relatively high consumption of steel bar and structural steel in the public
sector during the next few years.
The Company's historically high capital investments over the past two years
should result in a meaningful increase in revenue growth and earnings power,
especially beginning in fiscal year 2001. The Company will continue to profit
from its vertical integration and unique business mix, and should be in a more
favorable pricing environment.
This outlook section contains forward-looking statements regarding the outlook
for the Company's financial results including shipments, pricing, demand,
production rates, and general market conditions. There is inherent risk and
uncertainty in any forward-looking statements. Variances will occur and some
could be materially different from management's current opinion. Developments
that could impact the Company's expectations include interest rate changes,
construction activity, metals pricing over which the Company exerts little
influence, new capacity and product availability from competing steel minimills
and other steel suppliers including import quantities and pricing, global
factors including credit availability, currency fluctuations, timing of
litigation settlements and decisions by governments impacting the level and pace
of overall economic growth.
LIQUIDITY
Cash flows from operations before changes in current assets and liabilities for
the three months ended November 30, 1999 were $26.3 million compared to $23.2
million last year. Also, net cash flows used by operating activities increased
to $28.1 million from $10.6 million in the prior year period.
Depreciation and amortization increased during the first quarter of 2000
primarily due to the capital projects at South Carolina and Alabama. Accounts
receivable increased partially due to higher sales in the first quarter 2000
than in the fourth quarter 1999 for the Steel Group and the Recycling segment.
The remainder of the increase was primarily due to slower collection of
retention and billings for large structural jobs. Accrued expenses decreased
$22.7 million due to the payment of incentive compensation and the funding of
employee benefit plans accrued at August 31, 1999.
Notes payable and commercial paper increased $18.1 million to supplement current
cash flows for funding working capital and capital expenditures. The Company
invested $11.7 million in property and equipment primarily in the Steel Group at
the Alabama and South Carolina mills, and in its fabrication operations. This
was substantially less than the $51.8 million spent during the prior year first
quarter.
Page 14
<PAGE> 16
At November 30, 1999, there were 14,374,095 common shares issued and outstanding
with 1,758,488 held in the Company's treasury. Stockholders' equity was $425
million or $29.60 per share. During the first quarter, the Company repurchased
73,800 shares of common stock at an average price of $31.05.
Net working capital was $299 million at November 30, 1999 compared to $291
million at August 31,1999. The current ratio was 1.8, unchanged from August
31, 1999. The Company's effective tax rate for the three months was 37.3%, the
same as the first quarter last year.
Long-term debt as a percent of total capitalization was 37.1% at November 30,
1999 compared to 37.5% at August 31, 1999. The ratio of total debt to total
capitalization plus short-term debt stood at 40.5%, slightly higher than 1999
year end due to capital expenditures and working capital requirements.
Page 15
<PAGE> 17
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the information incorporated by reference from
Item 3. Legal Proceedings in the Company's Annual Report on Form 10-K for the
year ending August 31, 1999, filed November 24, 1999, with the Securities and
Exchange Commission.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits required by Item 601 of Regulation S-K.
27. Financial Data Schedule for the period ended
November 30, 1999.
B. No reports on Form 8-K have been filed during the
quarter for which this report is filed.
Page 16
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMERCIAL METALS COMPANY
January 7, 2000 William B. Larson
Vice President
& Chief Financial Officer
January 7, 2000 Malinda G. Passmore
Controller
Page 17
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
EX 27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 17,594
<SECURITIES> 0
<RECEIVABLES> 339,902
<ALLOWANCES> 7,939
<INVENTORY> 245,595
<CURRENT-ASSETS> 660,046
<PP&E> 810,382
<DEPRECIATION> 411,335
<TOTAL-ASSETS> 1,074,787
<CURRENT-LIABILITIES> 360,928
<BONDS> 0
0
0
<COMMON> 80,663
<OTHER-SE> 344,752
<TOTAL-LIABILITY-AND-EQUITY> 1,074,787
<SALES> 612,427
<TOTAL-REVENUES> 612,427
<CGS> 534,993
<TOTAL-COSTS> 534,993
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 134
<INTEREST-EXPENSE> 5,824
<INCOME-PRETAX> 16,308
<INCOME-TAX> 6,075
<INCOME-CONTINUING> 10,233
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,233
<EPS-BASIC> .71
<EPS-DILUTED> .70
</TABLE>
