IRVING, Texas, Oct. 28, 2015 /PRNewswire/ -- Commercial Metals Company (NYSE: CMC) today announced financial results for its fiscal fourth quarter and year ended August 31, 2015. For the year ended August 31, 2015, net earnings attributable to CMC were $141.6 million, or $1.20 per diluted share, on net sales of $6.0 billion. This compares to net earnings attributable to CMC of $115.6 million, or $0.97 per diluted share, on net sales of $6.8 billion for the year ended August 31, 2014. Net loss attributable to CMC for the three months ended August 31, 2015 was $5.8 million, or $0.05 per share, on net sales of $1.4 billion. This compares to net earnings attributable to CMC of $34.9 million, or $0.29 per diluted share, on net sales of $1.8 billion for the three months ended August 31, 2014.

Results for the fourth quarter of fiscal 2015 included after-tax LIFO expense from continuing operations of $23.7 million ($0.20 per share), compared to after-tax LIFO income from continuing operations of $1.0 million ($0.01 per diluted share) for the fourth quarter of fiscal 2014. Additionally, our results from continuing operations for the fiscal fourth quarter included after-tax charges related to goodwill impairment for our Americas Recycling segment of $4.7 million ($0.04 per share), costs associated with exiting our distribution operation in Cardiff, Wales, UK of $2.9 million ($0.03 per share), and other charges including inventory write-downs, severance cost and long-lived asset impairments totaling $4.0 million ($0.03 per share). The sum of these items negatively impacted our earnings from continuing operations for the fourth quarter of our fiscal year by a total of $0.30 per share. Adjusted operating profit from continuing operations was $12.3 million for the fourth quarter of fiscal 2015, compared to adjusted operating profit from continuing operations of $68.8 million for the fourth quarter of fiscal 2014. Adjusted EBITDA from continuing operations was $54.6 million for the fourth quarter of fiscal 2015, compared to adjusted EBITDA from continuing operations of $104.4 million for the fourth quarter of fiscal 2014.

Joe Alvarado, Chairman of the Board, President and CEO, commented, "For our fiscal year ended August 31, 2015, we achieved adjusted EBITDA from continuing operations of $464.6 million, our best since fiscal 2008. In August, construction spending continued to rise for the eighth consecutive month, led by an increase in non-residential construction spending year over year. During the fourth quarter of fiscal 2015, we completed the sale of a majority of our Australian distribution business. Six of the locations were sold, three were shut down, while one remains held for sale. For fiscal 2015, net cash flows from operating activities were $313.5 million."

On October 28, 2015, the board of directors of CMC declared a quarterly dividend of $0.12 per share of CMC common stock for stockholders of record on November 11, 2015. The dividend will be paid on November 25, 2015.

Business Segments - Fiscal Fourth Quarter 2015 Review

Our Americas Recycling segment recorded an adjusted operating loss of $15.4 million for the fourth quarter of fiscal 2015, compared to an adjusted operating loss of $2.1 million for the fourth quarter of fiscal 2014. During the fourth quarter of fiscal 2015, ferrous and nonferrous shipments decreased 22% and 14%, respectively, while the average ferrous metal margin was flat, and the average nonferrous metal margin contracted 20%, compared to the fourth quarter of the prior fiscal year. Furthermore, this segment recorded goodwill impairment charges of $7.3 million as a result of the Company's annual goodwill impairment analysis in the fourth quarter of fiscal 2015. Additionally, for the fourth quarter of fiscal 2015, this segment recorded pre-tax LIFO expense of $1.5 million, compared to pre-tax LIFO income of $0.3 million for the fourth quarter of the prior fiscal year.

Our Americas Mills segment recorded an adjusted operating profit of $46.2 million for the fourth quarter of fiscal 2015, compared to an adjusted operating profit of $63.8 million for the fourth quarter of fiscal 2014. The decrease in adjusted operating profit for the fourth quarter of fiscal 2015 was due to a 6% decrease in total shipments, which outpaced a 2% increase in average metal margin compared to the fourth quarter of fiscal 2014. The decrease in total shipments was driven by a 38 thousand short ton decrease in billet shipments and a nine thousand short ton decrease in shipments of our higher margin finished products, including reinforcement bar ("rebar") and merchants, compared to the fourth quarter of fiscal 2014. Additionally, for the fourth quarter of fiscal 2015, this segment recorded pre-tax LIFO expense of $13.9 million, compared to pre-tax LIFO expense of $6.1 million for the fourth quarter of the prior fiscal year.

Our Americas Fabrication segment recorded an adjusted operating profit of $7.5 million for the fourth quarter of fiscal 2015, compared to an adjusted operating profit of $8.1 million for the fourth quarter of fiscal 2014. For the fourth quarter of fiscal 2015, total shipments increased 1%, and the average composite metal margin expanded 23%, compared to the fourth quarter of fiscal 2014. Offsetting these improvements, for the fourth quarter of fiscal 2015, this segment recorded pre-tax LIFO expense of $11.0 million, compared to pre-tax LIFO income of $3.8 million for the fourth quarter of fiscal 2014.

Our International Mill segment recorded an adjusted operating profit of $6.4 million for the fourth quarter of fiscal 2015, compared to an adjusted operating profit of $5.0 million in the prior year's fourth quarter. For the fourth quarter of fiscal 2015, the average selling price decreased $137 per short ton, while the average cost of ferrous scrap consumed decreased $85 per short ton, resulting in a 21% squeeze in average metal margin, compared to the fourth quarter of fiscal 2014. Additionally, during the fourth quarter of fiscal 2015, total shipments decreased 1% compared to the fourth quarter of the prior fiscal year. However, the decreases in average metal margin and total shipments were more than offset by an $8.3 million decline in utilities and repairs and maintenance expenses partially due to efficiencies gained from the commissioning of a new, state-of-the-art electric arc furnace in the third quarter of fiscal 2014. For the fourth quarter of fiscal 2015, adjusted operating profit reflected an unfavorable foreign currency impact of approximately $2.2 million.

Our International Marketing and Distribution segment recorded an adjusted operating loss of $13.7 million for the fourth quarter of fiscal 2015, compared to an adjusted operating profit of $15.5 million in the prior year's fourth quarter. The $29.2 million decline in adjusted operating profit in the fourth quarter of fiscal 2015 was the result of an 18% decrease in volumes coupled with a 31% decrease in average margin, compared to the fourth quarter of fiscal 2014. This segment's results continued to be pressured by the strong U.S. dollar, global steel overcapacity and weak oil and gas tubular demand. In addition, during the fourth quarter of fiscal 2015, we made the decision for an orderly exit of our steel distribution operation in Cardiff, Wales, UK, and this segment recorded an expense of approximately $4.5 million associated with this action. Furthermore, for the fourth quarter of fiscal 2015, this segment recorded pre-tax LIFO expense of $10.1 million, compared to pre-tax LIFO income of $3.5 million for the fourth quarter of the prior fiscal year.

Fiscal 2015 Full Year Review

Earnings from continuing operations for fiscal 2015 were $161.3 million, or $1.37 per diluted share. For the year ended August 31, 2015, net cash flow from operating activities was $313.5 million, and adjusted EBITDA from continuing operations was $464.6 million. On a continuing operations basis, for fiscal 2015, we recorded after-tax LIFO income of $51.5 million ($0.44 per diluted share), compared to after-tax LIFO expense of $8.8 million ($0.07 per diluted share) in fiscal 2014. As of August 31, 2015, cash and short-term investments totaled $485.3 million, an increase of 12% from the end of our 2014 fiscal year.

Pursuant to our share repurchase program that was approved in October 2014, during fiscal 2015, we purchased approximately 2.9 million shares of our common stock for $41.8 million.

Loss from discontinued operations for fiscal year 2015 was $19.7 million, which primarily consisted of operating losses related to our Australian steel distribution business.

Outlook

Mr. Alvarado concluded, "Non-residential construction spending, which is our primary end use market in the U.S., was up 24% year over year in August. However, we believe our operations will continue to face pressure from historically high steel import activity into the U.S. and Poland, a strong U.S. dollar and continued weakness in the scrap markets. We believe the increased import activity is a result of unfair trading practices by certain foreign producers. While recent legislation passed by the U.S. government has improved the trading landscape, further legislation is necessary to bring global steel trading to a more level playing field. Additionally, we believe that China's inability to consume all of their production will continue to cause a negative effect around the world. In light of these market difficulties, we remain committed to managing the items within our control, namely reducing selling, general and administrative expenses, improving working capital, cost savings through supply chain optimization and prudent allocation of capital.

Our first quarter of the fiscal year historically has been a seasonally slower period as the construction season winds down before the onset of the winter months. We believe that our Americas Mills operations remain strong, and the backlog in our Americas Fabrication business is good."

Conference Call

CMC invites you to listen to a live broadcast of its fourth quarter fiscal 2015 conference call today, Wednesday, October 28, 2015, at 11:00 a.m. ET. Joe Alvarado, Chairman of the Board, President and CEO, and Barbara Smith, Senior Vice President and CFO, will host the call. The call is accessible via our website at www.cmc.com. In the event you are unable to listen to the live broadcast, the call will be archived and available for replay on our website on the next business day. Financial and statistical information presented in the broadcast are located on CMC's website under "Investors".

Commercial Metals Company 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, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.

Forward-Looking Statements

This news release contains forward-looking statements regarding CMC's expectations relating to economic conditions and CMC's operating plans and segment results. These forward-looking statements generally can be identified by phrases such as we, CMC or its management, "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears" or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, CMC undertakes no obligation to update, amend or clarify any forward-looking statements to reflect events, new information or otherwise.

Factors that could cause actual results to differ materially from CMC's expectations include the following: overall global economic conditions, including recovery from the recent recession, continued sovereign debt problems in the Euro-zone and construction activity or lack thereof, and their impact in a highly cyclical industry; rapid and significant changes in the price of metals; excess capacity in our industry, particularly in China, and product availability from competing steel minimills and other steel suppliers including import quantities and pricing; compliance with and changes in environmental laws and regulations, including increased regulation associated with climate change and greenhouse gas emissions; potential limitations in our or our customers' ability to access credit and non-compliance by our customers with our contracts; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; currency fluctuations; global factors, including political and military uncertainties; availability of electricity and natural gas for minimill operations; information technology interruptions and breaches in security data; ability to retain key executives; our ability to make necessary capital expenditures; availability and pricing of raw materials over which we exert little influence, including scrap metal, energy, insurance and supply prices; unexpected equipment failures; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and increased costs related to health care reform legislation.




                                                                                          COMMERCIAL METALS COMPANY
                                                                           OPERATING STATISTICS AND BUSINESS SEGMENTS (UNAUDITED)

                                                                                                                                           Three Months Ended              Fiscal Year Ended
                                                                                                                                           ------------------              -----------------

    (short tons in thousands)                                                                                                     08/31/15          08/31/14       08/31/15                08/31/14
    ------------------------                                                                                                      --------          --------       --------                --------

    Americas Recycling tons shipped                                                                                                           472                        601                           2,003       2,329

    Americas Steel Mills rebar shipments                                                                                                      435                        422                           1,644       1,577

    Americas Steel Mills structural and other shipments                                                                                       250                        310                           1,043       1,196
                                                                                                                                                                        ---                           -----       -----

    Total Americas Steel Mills tons shipped                                                                                                   685                        732                           2,687       2,773

                                                                                                                                              592                        684                                        675
    Americas Steel Mills average FOB selling price (total sales)                                                                         $                      $                                     $637   $
                                                                                                                                                                        344                       
    $               348
    Americas Steel Mills average cost ferrous scrap utilized                                                                                 $244                $                                      282   $
                                                                                                                                                              ---                                      ---
                                                                                                                                              348                        340                       
    $               327
    Americas Steel Mills metal margin                                                                                                    $                      $                                      355   $
                                                                                                                                              206                                                 
    $
    Americas Steel Mills average ferrous scrap purchase price                                                                            $                             $298                             239        $305

                                                                                                                                                                        332
    International Mill tons shipped                                                                                                           328                                                     1,226       1,285

                                                                                                                                              444                        581                                        605
    International Mill average FOB selling price (total sales)                                                                           $                      $                                     $480   $
                                                                                                                                              252                        337                                        351
    International Mill average cost ferrous scrap utilized                                                                               $                      $                                     $274   $
                                                                                                                                                              ---                                     ----
                                                                                                                                              192                        244                                        254
    International Mill metal margin                                                                                                      $                      $                                     $206   $
                                                                                                                                              213                        275                       
    $               297
    International Mill average ferrous scrap purchase price                                                                              $                      $                                      231   $


    Americas Fabrication rebar shipments                                                                                                      294                        285                           1,026         988
                                                                                                                                                                                                                  152
    Americas Fabrication structural and post shipments                                                                                         32                         38                             135
                                                                                                                                              ---                        ---                             ---
                                                                                                                                                                                                                1,140
    Total Americas Fabrication tons shipped                                                                                                   326                        323                           1,161

                                                                                                                                              905                        933
    Americas Fabrication average selling price (excluding stock and buyout                                                               $                      $                                     $943        $928
    sales)



    (in thousands)                                                Three Months Ended                     Fiscal Year Ended
    -------------                                                 ------------------                     -----------------

    Net sales                                                               08/31/15            08/31/14                    08/31/15  08/31/14
    ---------                                                               --------            --------                    --------  --------
                                                                                                                                            
    $                           $
    1,367,070
    Americas Recycling                                                                 $222,387                              $351,496                1,022,621

    Americas Mills                                                           441,295                            525,760                1,841,812               1,991,334

    Americas Fabrication                                                                449,445                               443,952                1,624,238                1,537,485

    International Mill                                                                  153,855                               205,123                  626,251                  823,193

    International Marketing and Distribution                                            376,329                               586,986                1,897,617                2,120,537

    Corporate and Eliminations                                                        (231,815)                            (276,008)             (1,023,934)             (1,049,181)
                                                                                                                            --------               ----------
                                                                                                                                                 $
    5,988,605              $
    6,790,438
    Total net sales                                                                  $1,411,496                            $1,837,309
                                                                                     ----------                            ----------


    Adjusted operating profit (loss)
    -------------------------------
                                                                                                                                            
    $                             $
    (3,222)
    Americas Recycling                                                                $(15,352)                             $(2,113)                (18,637)

    Americas Mills                                                                       46,164                                63,764                  304,272                  247,703

    Americas Fabrication                                                                  7,541                                 8,065                   39,183                    6,196

    International Mill                                                                    6,367                                 4,985                   17,555                   30,632

    International Marketing and Distribution                                           (13,714)                               15,475                   57,885                   24,027

    Corporate and Eliminations                                                         (18,662)                             (21,397)                (76,423)                (72,649)

    Adjusted operating profit from continuing operations                                 12,344                                68,779                  323,835                  232,687

    Adjusted operating profit (loss) from discontinued operations                           257                               (2,782)                (18,923)                  15,739
                                                                                                                              ------                  -------
                                                                                                                                                                           $
    248,426
    Adjusted operating profit                                                           $12,601                               $65,997                 $304,912
                                                                                        -------                               -------                 --------



                                                                        COMMERCIAL METALS COMPANY

                                                        CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

                                                 Three Months Ended                                       Fiscal Year Ended
                                                 ------------------                                       -----------------

    (in thousands, except share
     data)                              08/31/15                            08/31/14                   08/31/15                  08/31/14
    ---------------------------         --------                            --------                   --------                  --------

    Net sales                                    $1,411,496                                            $1,837,309                         $5,988,605  $6,790,438

    Costs and expenses:

    Cost of goods sold                 1,279,687                             1,653,857                                 5,213,203            6,109,338

    Selling, general and
     administrative expenses             110,131                               113,514                                   443,275              448,943

    Impairment of assets                   9,651                                 2,400                                     9,839                3,305

    Interest expense                      18,932                                19,803                                    77,760               77,037
                                          ------                                ------                                    ------               ------

                                       1,418,401                             1,789,574                                 5,744,077            6,638,623

    Earnings (loss) from continuing
     operations before income taxes      (6,905)                               47,735                                   244,528              151,815

    Income taxes (benefit)               (1,046)                               10,067                                    83,206               42,724
                                          ------                                ------                                    ------               ------

    Earnings (loss) from continuing
     operations                          (5,859)                               37,668                                   161,322              109,091
                                          ------                                ------                                   -------              -------


    Earnings (loss) from
     discontinued operations before
     income taxes                            117                               (2,964)                                 (20,124)              15,005

    Income taxes (benefit)                     9                                 (222)                                    (436)               8,544
                                             ---                                  ----                                      ----                -----

    Earnings (loss) from
     discontinued operations                 108                               (2,742)                                 (19,688)               6,461
                                             ---                                ------                                   -------                -----


    Net earnings (loss)                  (5,751)                               34,926                                   141,634              115,552

    Less net earnings attributable
     to noncontrolling interests               -                                    -                                        -                   1
                                             ---                                  ---                                      ---                 ---

    Net earnings (loss) attributable
     to CMC                                        $(5,751)                                              $34,926                           $141,634    $115,551
                                                    -------                                               -------                           --------    --------


    Basic earnings (loss) per share
     attributable to CMC:

    Earnings (loss) from continuing
     operations                                     $(0.05)                                                $0.32                              $1.39       $0.93

    Earnings (loss) from
     discontinued operations                   -                               (0.03)                                   (0.17)                0.05
                                             ---                                -----                                     -----                 ----

    Net earnings (loss)                             $(0.05)                                                $0.29                              $1.22       $0.98


    Diluted earnings (loss) per
     share attributable to CMC:

    Earnings (loss) from continuing
     operations                                     $(0.05)                                                $0.32                              $1.37       $0.92

    Earnings (loss) from
     discontinued operations                   -                               (0.03)                                   (0.17)                0.05
                                             ---                                -----                                     -----                 ----

    Net earnings (loss)                             $(0.05)                                                $0.29                              $1.20       $0.97


    Cash dividends per share                          $0.12                                                 $0.12                              $0.48       $0.48
                                                      -----                                                 -----                              -----       -----

    Average basic shares outstanding 115,695,791                           117,784,487                               116,527,265          117,496,270
                                     -----------                           -----------                               -----------          -----------

    Average diluted shares
     outstanding                     115,695,791                           118,862,975                               117,949,898          118,607,106
                                     -----------                           -----------                               -----------          -----------



                                                               COMMERCIAL METALS COMPANY
                                                   CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

    (in thousands)                                                                           August 31,           August 31,
                                                                                                           2015                  2014
    ---                                                                                                    ----                  ----

    Assets

    Current assets:
                                                                                                                             434,925
    Cash and cash equivalents                                                                          $485,323 $

    Accounts receivable, net                                                                            900,619             1,028,425

    Inventories, net                                                                                    781,371               935,411

    Current deferred tax assets                                                                          29,137                49,455

    Other current assets                                                                                 93,643               105,575

    Assets of businesses held for sale                                                                   17,008                     -
                                                                                                         ------                   ---

    Total current assets                                                                              2,307,101             2,553,791

    Net property, plant and equipment                                                                   883,650               925,098

    Goodwill                                                                                             66,383                74,319

    Other assets                                                                                        115,168               135,312

    Total assets                                                                                     $3,372,302            $3,688,520
                                                                                                     ----------            ----------

    Liabilities and stockholders' equity

    Current liabilities:

    Accounts payable-trade                                                                             $260,984              $423,807

    Accounts payable-documentary letters of credit                                                       41,473               125,053

    Accrued expenses and other payables                                                                 279,415               322,000

    Notes payable                                                                                        20,090                12,288

    Current maturities of long-term debt                                                                 10,110                 8,005

    Liabilities of businesses held for sale                                                               5,276                     -
                                                                                                          -----                   ---

    Total current liabilities                                                                           617,348               891,153

    Deferred income taxes                                                                                55,803                55,600

    Other long-term liabilities                                                                         101,919               112,134

    Long-term debt                                                                                    1,277,882             1,281,042
                                                                                                      ---------             ---------

    Total liabilities                                                                                 2,052,952             2,339,929

    Stockholders' equity attributable to CMC                                                          1,319,201             1,348,480

    Stockholders' equity attributable to
     noncontrolling interests                                                                               149                   111
                                                                                                            ---                   ---

    Total equity                                                                                      1,319,350             1,348,591

    Total liabilities and stockholders' equity                                                       $3,372,302            $3,688,520
                                                                                                     ----------            ----------




                                             COMMERCIAL METALS COMPANY AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                      Fiscal Year Ended
                                                                      -----------------

    (in thousands)                                                             08/31/15               08/31/14
    -------------                                                              --------               --------

    Cash flows from (used by) operating
     activities:

    Net earnings                                                                             $141,634            $115,552

    Adjustments to reconcile net earnings
     to cash flows from (used by)
     operating activities:

    Depreciation and amortization                                                             132,779             136,004

    Provision for losses on receivables,
     net                                                                                        3,481             (1,760)

    Stock-based compensation                                                                   23,484              18,051

    Amortization of interest rate swaps
     termination gain                                                                         (7,597)            (7,597)

    Deferred income taxes                                                                      23,291              32,348

    Tax expense from stock-based plans                                                          1,213               4,426

    Net gain on sale of a subsidiary,
     cost method investment and other                                                         (8,489)           (31,356)

    Write-down of inventory                                                                    15,935               4,000

    Asset impairments                                                                          14,610               3,498

    Changes in operating assets and
     liabilities, net of acquisitions:

    Accounts receivable                                                                       206,633           (143,397)

    Accounts receivable sold, net                                                           (117,753)            120,957

    Inventories                                                                                50,747           (177,331)

    Other assets                                                                               23,674            (20,516)

    Accounts payable, accrued expenses
     and other payables                                                                     (180,517)             90,604

    Other long-term liabilities                                                               (9,664)            (6,543)
                                                                                               ------              ------

    Net cash flows from operating
     activities                                                                               313,461             136,940

    Cash flows from (used by) investing
     activities:

    Capital expenditures                                                                    (119,580)          (101,749)

    Proceeds from the sale of property,
     plant and equipment and other                                                             14,925              17,572

    Proceeds from the sale of
     subsidiaries                                                                              27,831              52,609

    Acquisitions, net of cash acquired                                                              -           (15,693)

    Net cash flows used by investing
     activities                                                                              (76,824)           (47,261)

    Cash flows from (used by) financing
     activities:

    Increase (decrease) in documentary
     letters of credit                                                                       (80,482)             11,753

    Short-term borrowings, net change                                                           7,802               6,315

    Repayments on long-term debt                                                             (11,335)            (7,677)

    Payments for debt issuance costs                                                                -              (431)

    Decrease in restricted cash                                                                 3,742              18,000

    Stock issued under incentive and
     purchase plans, net of forfeitures                                                       (1,492)            (1,488)

    Treasury stock acquired                                                                  (41,806)                  -

    Cash dividends                                                                           (55,945)           (56,428)

    Tax expense from stock-based plans                                                        (1,213)            (4,426)

    Contribution from (purchase of)
     noncontrolling interests                                                                      38                (15)
                                                                                                  ---                 ---

    Net cash flows used by financing
     activities                                                                             (180,691)           (34,397)

    Effect of exchange rate changes on
     cash                                                                                      (5,548                 873
                                                                                               ------                 ---

    Increase in cash and cash equivalents                                                      50,398              56,155

    Cash and cash equivalents at
     beginning of year                                                                        434,925             378,770

    Cash and cash equivalents at end of
     year                                                                                    $485,323            $434,925
                                                                                             --------            --------

COMMERCIAL METALS COMPANY
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
(dollars in thousands)

This press release contains financial measures not derived in accordance with generally accepted accounting principles ("GAAP"). Reconciliations to the most comparable GAAP measures are provided below.

Adjusted Operating Profit is a non-GAAP financial measure. Management uses adjusted operating profit to evaluate the financial performance of CMC. Adjusted operating profit is the sum of adjusted operating profit from continuing operations and adjusted operating profit (loss) from discontinued operations. Adjusted operating profit from continuing operations is the sum of our earnings (loss) from continuing operations before income taxes (benefit), interest expense and discounts on sales of accounts receivable. Adjusted operating profit (loss) from discontinued operations is the sum of our earnings (loss) from discontinued operations before income taxes (benefit), interest expense and discounts on sales of accounts receivable. For added flexibility, we may sell certain accounts receivable both in the U.S. and internationally. We consider sales of receivables as an alternative source of liquidity to finance our operations, and we believe that removing these costs provides a clearer perspective of CMC's operating performance. Adjusted operating profit may be inconsistent with similar measures presented by other companies.



                            Three Months Ended                 Fiscal Year Ended

    (in thousands)    08/31/15               08/31/14  08/31/15                 08/31/14
    -------------     --------               --------  --------                 --------
     Earnings (loss)
      from continuing
      operations            
    $                                                              161,322
                                  (5,859)               $37,668                         $             $109,091

    Income taxes
     (benefit)         (1,046)                 10,067     83,206                    42,724

    Interest expense    18,932                  19,803     77,760                    77,037

    Discounts on
     sales of
     accounts
     receivable            317                   1,241      1,547                     3,835
                           ---

    Adjusted
     operating profit
     from continuing
     operations         12,344                  68,779    323,835                   232,687

    Adjusted
     operating profit
     (loss) from
     discontinued
     operations            257                 (2,782)  (18,923)                    15,739
                                               ------    -------                    ------

    Adjusted
     operating profit             $12,601                $65,997                             $304,912   $248,426
                                  -------                -------                             --------   --------

Adjusted EBITDA is a non-GAAP financial measure. Adjusted EBITDA is the sum of adjusted EBITDA from continuing operations and adjusted EBITDA from discontinued operations. Adjusted EBITDA from continuing operations is the sum of our earnings (loss) from continuing operations before net earnings attributable to noncontrolling interests, interest expense and income taxes (benefit). It also excludes CMC's largest recurring non-cash charge, depreciation and amortization, as well as impairment charges, which are also non-cash. Adjusted EBITDA from discontinued operations is the sum of our earnings (loss) from discontinued operations before net earnings attributable to noncontrolling interests, interest expense and income taxes (benefit). It also excludes the largest recurring non-cash charge from discontinued operations, depreciation and amortization, as well as impairment charges from discontinued operations, which are also non-cash. Adjusted EBITDA should not be considered as an alternative to net earnings or as a better measure of liquidity than net cash flows from operating activities, as determined by GAAP. However, we believe that adjusted EBITDA provides relevant and useful information, which is often used by analysts, creditors and other interested parties in our industry. Adjusted EBITDA to interest expense is a covenant test in certain of CMC's debt agreements. Adjusted EBITDA is also the target benchmark for our annual and long-term cash incentive performance plans for management. Adjusted EBITDA may be inconsistent with similar measures presented by other companies.



                             Three Months Ended                  Fiscal Year Ended
                             ------------------                  -----------------

    (in thousands)     08/31/15                  08/31/14             08/31/15              08/31/14
    -------------      --------                  --------             --------              --------
     Earnings (loss)
      from continuing
      operations                                                                                        109,091
                                  $(5,859)                $37,668                    $161,322        $

    Less: Net earnings
     attributable to
     noncontrolling
     interests                -                      -                    -                  1

    Interest expense     18,932                  19,803                77,760              77,037

    Income taxes
     (benefit)          (1,046)                 10,067                83,206              42,724

    Depreciation and
     amortization        32,950                  34,438               132,503             134,222

    Impairment charges    9,651                   2,400                 9,839               3,305
                          -----                                                           -----

    Adjusted EBITDA
     from continuing
     operations          54,628                 104,376               464,630             366,378

    Adjusted EBITDA
     from discontinued
     operations           1,685                  (2,475)             (14,775)             17,684
                          -----                  ------               -------              ------
                                                                                   $
    449,855           $
    384,062
    Adjusted EBITDA                $56,313                $101,901
                                   -------                --------

Adjusted EBITDA to interest coverage:



    Three Months Ended August 31, 2015                        Year Ended August 31, 2015

                    $56,313       /    $18,932 = 3.0 $449,855 /        77,760        =   5.8

Total Capitalization:

Total capitalization is a non-GAAP financial measure and is the sum of stockholders' equity attributable to CMC, long-term debt and deferred income taxes. The ratio of debt to total capitalization is a measure of current debt leverage. The following reconciles total capitalization to the most comparable GAAP measure, stockholders' equity attributable to CMC:



    (in thousands)                    August 31, 2015
    -------------                     ---------------

    Stockholders' equity attributable
     to CMC                                           $1,319,201

    Long-term debt                          1,277,882

    Deferred income taxes                      55,803

    Total capitalization                              $2,652,886
                                                      ----------

OTHER FINANCIAL INFORMATION
Long-term debt to total capitalization ratio as of August 31, 2015:



     $1,277,882 / $2,652,886 = 48.2%

Total debt to total capitalization plus short-term debt plus notes payable ratio as of August 31, 2015:



     ($1,277,882 + $10,110 + $20,090) / ($2,652,886 + $10,110 + $20,090) = 48.8%

Current ratio as of August 31, 2015:
Current assets divided by current liabilities



     $2,307,101 / $617,348 = 3.7

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SOURCE Commercial Metals Company