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DATE

Thursday, Oct. 15, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations - Andy Larkin
• President and Chief Executive Officer - Peter R. Matt
• Senior Vice President and Chief Financial Officer - Paul J. Lawrence

TAKEAWAYS

• Net Sales -- $2.7 billion, representing a 25.7% increase year over year driven by higher shipment volumes and the inclusion of acquired precast operations.
• Core EBITDA -- $393.7 million, increasing 35.1% year over year reflecting strong execution in the North American steel business, precast acquisitions, and TAG initiatives.
• Core EBITDA Margin -- 14.8%, expanding 100 basis points compared to the prior year due to metal margin expansion and the integration of higher-margin precast products.
• Adjusted EPS -- $2.09 per diluted share, representing a 52.6% increase compared to the prior year period.
• North America Steel Group Adjusted EBITDA -- $317.5 million, growing 32.6% year over year driven by richer product mix and ongoing operational excellence initiatives.
• Steel Metal Margin -- $652 per ton, increasing $42 per ton sequentially due to a $32 per ton rise in average selling prices and a $10 per ton decline in scrap costs.
• Merchant Bar Shipments -- 311,000 tons, surging 27.5% year over year reflecting increased production from the Arizona II micro mill and strong demand in industrial and data center sectors.
• Downstream Backlog Volume -- increased 15.5% year over year and 5% sequentially, reflecting successful commercial discipline on large, complex megaprojects.
• Construction Solutions Group Net Sales -- $431.4 million, increasing 94.5% year over year primarily due to the addition of the precast platform.
• Precast Adjusted EBITDA -- $57 million, coming in below management expectations because of residential sector softness in Southeast markets.
• Construction Solutions Group Bookings -- increased 12.6% sequentially, driven by healthy demand in infrastructure and nonresidential end markets.
• Europe Steel Group Adjusted EBITDA -- $15.6 million, decreasing year over year from $39.1 million because the prior year period included $30.7 million in CO2 credits.
• Europe Steel Metal Margin -- $349 per ton, expanding $32 per ton year over year supported by strengthening steel prices that outpaced scrap cost increases.
• TAG Run Rate Benefits -- $250 million achieved in gross run rate benefits by year-end, with management targeting an additional $100 million in run rate benefits by the end of fiscal 2027.
• Fiscal 2027 Capital Expenditures -- $400 million, a decline of $200 million compared to fiscal 2026 as the company cycles past heavy investment in the West Virginia micro mill.
• West Virginia Micro Mill Ramp-up -- expected to produce slightly under 200,000 tons in fiscal 2027, with management anticipating EBITDA breakeven within six months of startup.
• Net Leverage Ratio -- 1.9x, falling below the company target of 2x following strong cash generation and debt discipline after precast acquisitions.
• Share Repurchase Authorization -- $702.1 million remaining, which management intends to accelerate given the current share price and free cash flow outlook.
• Federal Cash Taxes -- expected to be negligible through much of fiscal 2027, supported by bonus depreciation and tax credits from the 48C program.
• Q1 2027 NASG Adjusted EBITDA Guidance -- projected to be nearly flat sequentially, as improved pricing is expected to offset seasonal shipment declines, startup expenses, and higher scrap costs.
• Q1 2027 Europe Adjusted EBITDA Guidance -- anticipated to increase meaningfully sequentially, benefiting from an expected $10 million to $15 million CO2 credit.
• Acquired Backlog Amortization -- $20 million expected in the first quarter and roughly 2 million in the second quarter of fiscal 2027.
• South Korean Rebar Imports -- decreased significantly in September, reflecting diminished arbitrage opportunities and increased domestic trade enforcement.

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RISKS

• Matt stated, "residential softness weighed on precast results in the period," noting that lower volumes in Southeastern markets impacted adjusted EBITDA performance.
• Lawrence indicated that energy costs in Europe increased approximately $10 per ton in the quarter and "could potentially increase by a further $10 to $15 per ton" in the first quarter of fiscal 2027.
• Matt warned that while nonresidential demand is strong, "residential remains mostly muted, particularly in new single family construction," creating regional volume and margin mix headwinds.

SUMMARY

Commercial Metals Company (CMC +0.49%) reported fiscal 2026 fourth-quarter and full-year results highlighted by significant margin expansion and the ongoing integration of its precast platform. Management reported that the company achieved its target leverage ratio earlier than anticipated, providing financial flexibility for accelerated capital returns to shareholders. The company stated that organic growth investments, specifically the West Virginia micro mill and GalvaBar expansion, are transitioning from capital consumption to return generation. According to management, operational gains from the TAG program and a richer product mix in merchant bar products helped offset residential market softness and higher input costs in certain regions.

• The company is shifting its production mix to capture higher-margin merchant bar opportunities, aiming for 1 million tons of annual shipments. CEO Matt stated, "As we start West Virginia, what that will do is it will free up South Carolina for example, to produce more merchant products."
• Management identified infrastructure and data center construction as primary demand drivers. Matt noted, "Activity related to areas like data centers, power generation utility infrastructure, semiconductor manufacturing and institutional markets is solid."
• The precast segment's integration is meeting synergy targets despite residential headwinds. Matt reported, "Integration activities remain on track and synergy capture is meeting or exceeding expectations."
• CMC is utilizing trade protections and consolidated market dynamics to support its domestic position. CEO Matt stated, "Existing Section 232 measures have proven both effective and durable."
• The company expects to benefit from $100 million in incremental TAG benefits in fiscal 2027. Matt indicated, "We exited fiscal 26 with more than $250 million of gross run rate benefits achieved and a clear line of sight on an additional $100 million of run rate benefits by the end of fiscal 2027."
• Free cash flow is expected to improve in fiscal 2027 as growth capital expenditures moderate. Paul Lawrence stated, "We expect the balance sheet to strengthen further in fiscal 27, supported by improving cash flow as capital expenditures moderate."

INDUSTRY GLOSSARY

• TAG: Transform, Advance, Grow; CMC's internal operational and commercial excellence program designed to improve margins and productivity.
• EBITDA: Earnings before interest, taxes, depreciation, and amortization.
• Rebar: Reinforcing bar; steel bars used to strengthen concrete in construction projects.
• Merchant Bar: A variety of steel shapes used in structural and industrial applications, such as angles, channels, and rounds.
• Micromill: A compact, efficient steel mill that utilizes electric arc furnace technology to produce steel from scrap.
• GalvaBar: A specialized, continuously galvanized rebar product providing enhanced corrosion resistance.
• GeoGrid: A geosynthetic material used for soil stabilization and reinforcement in infrastructure and construction.
• 48C Program: A federal tax credit incentive in the United States for investments in advanced energy manufacturing projects.
• CBAM: Carbon Border Adjustment Mechanism; a European Union trade measure that places a carbon price on imported goods to equalize costs with domestic producers.
• TRQ: Tariff-rate quota; a trade policy that allows a set volume of goods to be imported at a lower tariff rate than the standard rate.

Full Conference Call Transcript

Operator: Good morning, and welcome to the Commercial Metals Company Fiscal 26 Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question, Please note this event is being recorded. I would now like to turn the conference over to Andy Larkin, Vice President of Investor Relations. Please go ahead.

Andy Larkin: Hello, and welcome to the Commercial Metals Company fiscal 26. Fourth Quarter and Year End Earnings Call. Joining me on today's call are Peter R. Matt, CMC's President and Chief Executive Officer and Paul J. Lawrence, Senior Vice President and Chief Financial Officer. Today's materials include the press release, supplemental slides that accompany this call, which can be found on CMC's Investor Relations website. As a reminder, today's call is being recorded. Peter will begin our prepared remarks with a high level overview of the year and fourth quarter, and comment on the progress against our strategic objectives. Paul will then provide a detailed discussion of our quarterly results as well as capital allocation.

Peter will wrap up with our view on the path ahead. We will then provide instructions for the question and answer session to follow. Today's discussion contains forward looking statements. Including with respect to economic conditions, effect of legislation and trade actions, U. S.

Steel import levels, construction activity, demand for finished steel products and precast concrete products, the expected capabilities, benefits, costs, and timeline for construction and commissioning of new facilities, the expected performance and integration of our recently acquired Precast platform, the company's operations, the company's strategic growth plans and its anticipated benefits, company's ability to achieve its stated deleveraging targets within the anticipated timeframe legal proceedings, the impact of tax credits on future results, the company's future results of operations, financial measures, and capital spending, including expected share repurchase activity These statements reflect the company's beliefs based on current conditions that are subject to risks and uncertainties.

Company's earnings release, most recent annual report on Form 10-K, 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. Unless stated otherwise, all references made to year or quarter end are references to the company's fiscal year, or fiscal quarter.

With that, I would like to turn the call over to CMC's President and CEO, Peter R. Matt.

Peter R. Matt: Thank you, Andy, and good morning to everyone joining us for today's call. We will discuss many accomplishments today, but none is more important than safety. I want to thank our employees for their continued focus and commitment to our most important company value. Our total recordable incident rate for fiscal 2026 remained near a historic low point and better than industry averages. During the year, we put significant effort into embedding CMC safety first culture across our newly acquired Precast operations and strengthening safety performance throughout the organization. While we are proud of that progress, our standard is higher. Our goal is zero harm, and we will be relentless in striving for it.

Now stepping back fiscal 2026 was a defining year for CMC. We made significant progress executing the strategy we laid out at our Investor Day. Strengthening the quality and durability of our earnings profile, expanding margins, reducing leverage enhancing free cash flow generation and positioning the company for sustained shareholder value creation. For the full year, core EBITDA increased to approximately $1.4 billion up from $837 million for fiscal 2025, while core EBITDA margin expanded 380 basis points to 14.5%. These results reflect meaningful progress across each of our strategic priorities, including the execution of our Transform Advance and Grow program, the advancement of key growth investments and the ongoing successful integration of our Precast acquisitions.

Just as importantly, we have strengthened our balance sheet Since completing our precast acquisitions, we have reduced leverage as adjusted for acquisitions to below our target range providing greater financial flexibility to invest in growth while returning capital to shareholders. Our momentum carried into the fourth quarter with core EBITDA increasing 35.1% year over year to approximately $394 million while core EBITDA margin expanded to 14.8%. Results in the quarter were driven by strong North American Steel Group performance, where execution against strategic priorities has created clear value for our business. Segment margins increased 22 basis points sequentially driven by strong TAG contributions including operational and commercial excellence initiatives.

We are also seeing that as the market and our customers pursue larger and more complex projects in energy, industrial reshoring, data center and institutional sectors, CMC's scale, capabilities and network are increasingly making CMC a preferred partner. Our downstream expertise with its customized solutions and customer focused approach has us positioned to win in this increasingly complex environment. Downstream product volumes grew 8.5% year-over-year in the fourth quarter expanding margins reflecting this dynamic. At the same time, our 27.5% year-over-year demonstrating the capabilities of the Arizona II plant and the flexibility it provides to optimize product mix to capitalize on strong market conditions and balance supply with demand.

For our Construction Solutions Group, fourth quarter results were below our expectations. Due primarily to our Precast business with residential softness in certain Southeastern markets. Notably, we have seen the same regional softness in our fabrication book though it is not visible externally given the geographic diversification of our fab footprint. As residential activity moderated, lower volumes and regional margin mix headwinds weighed on adjusted EBITDA performance. Precast generated adjusted EBITDA of $57.1 million during the quarter and excluding the purchase accounting impact, has contributed roughly $150 million of adjusted EBITDA since our acquisition. The leading indicators for the business remain positive.

The demand environment especially in non residential and infrastructure remains healthy with strong bidding activity in key markets like Atlanta, picking up in recent months. Bookings were up year over year and increased 12.6% sequentially. Backlog levels are up roughly 3% versus the prior year and 4% versus Q3. While average backlog pricing has also trended higher. These factors position the business for solid performance in the year ahead. Strategically, as we close 2027 and look ahead to fiscal 2020, we are highly confident in our direction and in the 3 powerful drivers of value creation we laid out at our Investor Day. First, we will continue capturing the full potential of our business through TAG.

Second, we will begin harvesting returns from significant growth capital deployed over the last several years. And third, we will continue reshaping our portfolio as a leading provider of early stage construction solutions. Together, these initiatives which are within our control, will power a stronger, CMC both operationally and financially. We have made significant progress in fiscal 2026 as TAG continued to evolve from a program into a core operating system for CMC. Across the enterprise, we realized meaningful productivity gains through yield improvements, scrap optimization, logistics efficiencies, manufacturing excellence initiatives and an increasing focus on commercial excellence. Looking ahead, the opportunity set remains substantial with a full pipeline of initiatives that will drive additional earnings growth and margin expansion.

We exited fiscal 26 with more than $250 million of gross run rate benefits achieved and a clear line of sight on an additional $100 million of run rate benefits by the end of fiscal 2027. We view TAG as a durable source of margin expansion and an increasingly important competitive advantage for CMC. Turning to growth investments, fiscal 2027 will mark an important transition. For several years, we have invested significant capital to strengthen and modernize our asset base. Nearly $1.5 billion of capital has been deployed to modernize and complete our coast to coast mill network both improving our competitiveness and providing network flexibility.

As we enter fiscal 2027, those investments increasingly shift from consuming capital to generating returns. At Steel West Virginia, commissioning and startup activities continued to progress well. The team is executing a disciplined commissioning process keeping its focus on safely increasing production developing the workforce and realizing the full potential of the mill. As production increases, Steel West Virginia will strengthen the flexibility of our whole network, enabling us to flex and optimize production cost and product mix to better serve customer demand for different products across our footprint. Before moving on, I would like to recognize the team leading the construction and commissioning of our West Virginia micromill.

Their efforts have been outstanding and reflect the disciplined approach to capital deployment and project execution that defines CMC. At Tensar, the new GeoGrid line in Blackwell, Oklahoma is well into its startup. And will increase geogrid production capacity enhance service levels and fuel growth in higher value non residential and infrastructure applications. We are equally encouraged by the construction progress at GalvaBar, Tennessee, we expect first production of our GalvaBar corrosion-resistant product beginning this November. The facility is expected to more than double our GalvaBar production capacity, expanding our presence in this attractive higher margin market segment. Beyond our organic growth investments, we are reshaping our portfolio and diversifying our earnings profile, most recently with our precast platform investments.

Turning to our Precast business, integration activities remain on track and synergy capture is meeting or exceeding expectations. A great example of this is where through best practice sharing across our network, we have implemented several new operational practices that will improve our safety performance and eliminate millions of dollars of waste from our supply chain. To date, we have substantially completed the functional integration of the creating a strong foundation to drive value creation. Utilizing a tag approach and mindset, we are advancing a broad range of operational excellence and commercial excellence initiatives and have identified further opportunities across operations, procurement footprint optimization and commercial execution that will enhance growth over time.

Precast plays a critical role in strengthening CMC's position in early stage construction solutions. The business enhances our portfolio with leading positions in attractive growth markets and in demand infrastructure applications. It brings compelling financial characteristics stronger more durable margins, lower capital intensity and attractive free cash flow generation. Precast also expands our growth runway through both organic opportunities and acquisition opportunities in a highly fragmented industry. With sound execution, we expect Precast to play a vital role in building a stronger CMC. Let's shift from our 3 value creation levers to the current operating environment. Regarding demand for early stage construction products, the direction of travel remains unchanged.

We see constructive conditions for all of our product categories across the majority of the markets we serve. Beginning with infrastructure, demand remains elevated. Significant federal and state funding continues to support a multiyear pipeline of projects, and with a substantial portion of available funding yet to be spent we have strong visibility into future activity. Nonresidential construction demand varies by market, but remains a source of strength for CMC. Activity related to areas like data centers, power generation utility infrastructure, semiconductor manufacturing and institutional markets is solid. And the Dodge Momentum Index remains near record levels suggesting a robust and extensive project pipeline. Many of these nonresidential projects are larger, more complex and increasingly requiring diverse solutions.

As noted earlier, this plays directly to CMC's strengths. Our vertically integrated network downstream capabilities and broad early stage construction portfolio are differentiators and position us to meet the complexity and scale of these mega project opportunities better than ever before. While residential remains mostly muted, particularly in new single family construction, we remain optimistic for this market over the long term where the housing shortage in The U. S. Will be a meaningful source of multiyear demand. On the steel supply side, our low cost and flexible North American steel network is well positioned to win in this environment.

The domestic rebar market remains highly consolidated and the import landscape has materially improved compared to just a few years ago. Existing Section 232 measures have proven both effective and durable. While recently finalized trade cases against unfairly traded imports have effectively removed hundreds of thousands of tons from the market. Importantly, rebar imports are beginning to show signs of moderation as arbitrage opportunities diminish. Notably, South Korean imports decreased in September as we have been expecting, and the imports from other sources continue at a fraction of prior year levels. Meanwhile, we continue to see heightened focus across the industry on trade enforcement and ensuring that imported material competes on a level playing field.

Taken together, we believe these dynamics support a more rational and sustainable competitive environment where CMC can reap the benefits from its investments made and to more fully capture the value we bring to the market. Now, before providing our outlook, I will ask Paul to go through the quarter in more detail. Paul?

Paul J. Lawrence: Thank you, Peter. I will pick up on Slide 13. Briefly, at the consolidated level, CMC reported fourth quarter net earnings of approximately $213 million. or $1.91 per diluted share. Similar to the third quarter, we incurred approximately $26.8 million of pretax expenses excluded from adjusted earnings. Including $19.8 million of noncash amortization related to acquired backlog. Adjusted earnings increased 21% sequentially. Core EBITDA margin remains an important indicator of the progress we are making. The benefits of our portfolio diversification strategy and TAG initiatives are becoming increasingly evident in this metric.

In the fourth quarter, core EBITDA margin increased 100 basis points year-over-year to 660 basis points sequentially, capping a very strong fiscal year and underscoring the enhanced earnings power of the business. Within the North American Steel Group, adjusted EBITDA increased 25.2% sequentially to $317 million driven by TAG benefits, metal margin expansion and growth in merchant bar shipments. Metal margin increased $42 per ton sequentially to $652 driven primarily by a $32 per ton increase in average selling price. The improvement in average selling price benefited from a richer product mix including higher merchant bar volumes, which currently carry a meaningful premium to rebar prices.

Meanwhile, scrap costs declined $10 per ton sequentially, Regarding scrap, we expect a relatively stable environment with some upward pressure in the near term correlated to the higher diesel cost we are incurring. Finished steel shipments increased 7.1% sequentially with strong growth across merchant products as well as downstream and rebar volumes. Our downstream backlog increased 15.5% year over year and 5% sequentially, demonstrating the value of our differentiated capabilities particularly on large, more complex projects. North America Steel Group adjusted EBITDA margin expanded to 16.4%, an increase of 22 basis points sequentially and 160 basis points compared to the same period of the prior year. For the Construction Solutions Group, net sales increased 94.5% year over year.

Adjusted EBITDA more than doubled. And adjusted EBITDA margin expanded 80 basis points. Beside precast, which Peter discussed earlier, Tensar delivered results that were largely consistent with both the prior quarter and the year ago period, capping a strong fiscal 26. In which profitability increased approximately 50%. This performance reflects solid commercial execution and healthy activity levels across its core end markets. Construction Services and Impact Metals also delivered strong year on year revenue and EBITDA growth during the quarter. Performance Reinforcing Steel results were lower due to an unplanned outage at our GalvaBar facility that affected shipments during the period. The outage is now resolved and customer demand remains robust.

With bookings, backlog and pricing trends continuing to support a positive outlook for the business. In Europe, adjusted EBITDA comparisons were affected by CO2 credits received in prior periods. We received credits totaling $30.7 million in the fourth quarter of fiscal 25 and $20.4 million in the third quarter of fiscal 26, while the current quarter did not benefit from any credits. Excluding these impacts, underlying business fundamentals in Poland continue to improve. Metal margin expanded $32 per ton year over year supported by strengthening steel prices, Average selling prices increased $44 per ton versus the prior year and $15 per ton sequentially in the fourth quarter.

Offsetting a portion of this benefit energy costs increasing approximately $10 per ton in the quarter. We anticipate energy costs to remain elevated in the first quarter and could potentially increase by a further $10 to $15 per ton. Market conditions in Europe are becoming increasingly constructive. The implementation of the CBAM and enhancements to the tariff rate quota framework are helping create a more favorable trade environment. Combined with gradually improving demand fundamentals these developments reinforce our confidence in a continued recovery toward mid cycle profitability. Over time. Lastly, a few comments on the balance sheet and capital allocation and key modeling considerations for fiscal 2027. Starting with the balance sheet.

In less than a year, we have successfully reduced net leverage adjusted for acquisitions to below our target of 2x. At 1.9x, this represents significant progress from post close levels and positions us to pursue our long term balance capital deployment priorities of growth shareholder returns. We expect the balance sheet to strengthen further in fiscal 27, supported by improving cash flow as capital expenditures moderate. In fiscal 2026, total capital spend was approximately $580 million. For fiscal 2027, we anticipate capital expenditures to decline by nearly $200 million to roughly $400 million as we cycle past the elevated investment levels associated primarily with the West Virginia micro mill project.

Roughly a quarter of our anticipated fiscal 2027 spend is associated with growth CapEx that we expect will further decrease in fiscal 2028. As a result, free cash flow and free cash flow conversion is expected to improve in fiscal 27 and again in fiscal 28. This increased financial flexibility creates opportunity to further enhance shareholder returns and reinforces a topic we first discussed at Investor Day. At that time, we announced a significantly expanded share repurchase authorization which currently has approximately $700 million remaining. Since then, our conviction has only strengthened. With our strong cash generating capabilities and the opportunity we see in the current share price, we intend to accelerate our pace of activity under the program.

This action reflects our confidence in CMC's outlook and our conviction that investing in our own shares represents a compelling value creation opportunity. Lastly, as you think about your fiscal 2027 models, there are 2 items worth noting. First, we have just over 1 quarter remaining of the acquired backlog amortization This will amount to $20 million in the first quarter and roughly $2 million in the second quarter. Second, CMC will continue to benefit from meaningful cash tax savings associated with the 48C program. Bonus depreciation related to our West Virginia mill investment and accelerated depreciation on assets acquired through the Precast acquisitions.

As a result, do not anticipate paying significant U.S. federal cash taxes through much of fiscal 2027. For modeling purposes, we expect our effective tax rate to be approximately 24% for fiscal 2027. With that, I will hand it back to Peter for our outlook. Peter?

Peter R. Matt: Thanks, Paul. As we look ahead to fiscal 2027, we are in encouraged by both the external environment and the opportunities within our control. Domestic steel supply remains disciplined. Demand for early stage construction products is supported by strong backlogs at attractive prices and our value creation initiatives continue to gain momentum. TAG remains a significant source of earnings growth Our recent growth investments are transitioning from capital deployment to return generation and our evolving portfolio is enhancing both the quality and the durability of our earnings. Together, these factors support our confidence that fiscal 2027 will be another solid year for CMC.

Specifically, for the first quarter, we continue to expect healthy operating performance across the portfolio, though normal seasonal factors and costs will impact results sequentially. Within our North American Steel Group, improved pricing is expected to largely offset higher scrap costs start up expenses and a slight seasonal decline in shipments resulting in adjusted EBITDA that is expected to be nearly flat in comparison to the fourth quarter. Within our Construction Solutions Group, adjusted EBITDA is expected to be down sequentially reflecting typical seasonal trends impacting the end market activity in this segment. In Europe, adjusted EBITDA is expected to meaningfully increase sequentially benefiting from the improving operating conditions and a CO2 credit.

All in all, we remain confident in the operating environment animated by our priorities and above all eager to deliver on the financial and strategic opportunities ahead of us in fiscal 2027. With that, I will ask the operator to provide instructions before fielding your questions. Thank you very much.

Operator: We will now begin the question and answer session. The first question today comes from Samuel McKinney with KeyBanc Capital Markets. Please go ahead.

Samuel McKinney: Hey, good morning, Peter and Paul.

Peter R. Matt: Good morning.

Samuel McKinney: Hey, after a relatively soft third quarter, you said it was challenged by weather. The fourth quarter precast EBITDA number came in about $20 million short of the number you intimated on the last call. Just given the residential market challenges, is annual run rate EBITDA around that $240 million to $250 million still the right way to be thinking about this business before you make any more acquisitions?

Peter R. Matt: Hey, thank you very much for the question. We believe it is. And we think that it is a good target for this year. When we look at the backlogs in the business, when we look at the progress we have had on integration, and kind of overall momentum, we feel like we can achieve that. We will have some near term-- and by near term, I am talking Q1 we will have some seasonal weakness. And that seasonal weakness probably leads to a Q1 that is going to be down mid- to high- single digits from where it is in Q4. But overall, we remain very positive on this business.

I think 1 thing that is interesting about this is that as residential has declined, it is been filled in by a strong slug of non res and infrastructure. And so again, that is what is supporting our backlog and giving us a lot of confidence in this. And pricing remains very strong in the business. We continue to see pricing rise across the portfolio. So I guess, all in all, we remain very confident and we see this as a continuing strong contributor to our portfolio.

Samuel McKinney: Okay. And then you did mention that the South Korean long product imports finally took a big step down in September. How do you think about the sustainability of these trends? And do you expect any sort of government action now that South Korea has also made itself a meaningful importer of flat products this year?

Peter R. Matt: Yeah. Well, I will not speak to flat products, but I will kind of keep my comments on the products that impact our business. Yes, we did see the significant decrease. We expected it to be a little sooner, but it did happen. And I think the reality is that when you kind of stack up the cost in the current environment of getting rebar to The U. S. From South Korea, it is not competitive with where our pricing is even with the current price increases that we have just recently put in place. And so I think economics are taking care of taking care of the issue for us for the short term.

As I have said in prior calls and engagements and at the Investor Day, where we see that someone is violating our trade laws, we are not going to be shy about going after them. But right now, I think, we are going to monitor the situation and we are comfortable with where things stand. I think it is also a further note that if you look at the countries against whom we or against which we filed these anti dumping and countervailing duty cases, They have effectively, gone away from the import market, right.

So we are not seeing any material imports from any of those countries, which I think kind of goes to support the point that I made at the Investor Day and I have made on calls before this that this is durable, supply management that we are working on. And again, I will remind the audience and you, I know you know this, but those anti dumping and countervailing duty cases and the duties that come from them, they have a duration of at least 5 years and generally 10.

Samuel McKinney: Yep. I appreciate it. Thanks, guys.

Paul J. Lawrence: Thank you.

Operator: The next question is from Satish Kasinathan with Bank of America. Please go ahead.

Satish Kasinathan: Good morning, Peter and Paul. Congrats on the strong finish to the year.

Peter R. Matt: Thanks.

Paul J. Lawrence: Yes.

Satish Kasinathan: My first question is on the guidance for the first quarter. Can you maybe walk us through some of the moving parts, especially like how much CO2 credits do you expect in EU and what is the magnitude of startup cost you are assuming for the West Virginia mill in Q1?

Paul J. Lawrence: Yeah. Satish, as we look at Europe, I think mentioned really 2 factors, the CO2 credit. We are expecting at this stage, you know, somewhere between $10 million and $15 million of CO2 credits. Offsetting that in Europe will be the higher energy costs that I cited. We have seen those so far throughout the quarter around $10 to $15 a ton. And so that will erode a little bit into the earnings of the business. So those are the 2 drivers of the Europe space overall expect, as we said, a meaningful increase in overall results. But guided by those 2 factors. And then on the start up costs, for West Virginia mill? Sorry. Yes.

And start up costs, we are as Peter said, we are making good progress on commissioning space. We anticipate that in the first quarter we will probably incur an extra $3 million to $5 million of incremental cost So what we have incurred in the fourth quarter was in the $9 million range. So it is just a slight uptick from that as we start the operation up.

Satish Kasinathan: Thank you. Maybe 1 follow-up on the Virginia mill. So can you maybe give some additional color on how you see the cadence of ramp-up? So when do you expect the first commercial shipments? And then are you still on track for maybe 150 thousand to 300 thousand tons of volumes from the mill that you previously guided to?

Peter R. Matt: Yes, I think so. Again, remember on this, we did have some construction weather delays. So but we are kind of making great progress on the hot commissioning at this point. We have rolled our first billet, and we are progressing with the start up. I think it is fair to say that we expect the start up to occur over kind of a 12-month period, and we should be breakeven after about 6 months. I think when we look at the overall project, we are super pleased with the fact that we have been able to bring it in kind of effectively on time and effectively on budget.

And I think that is a testament to the as I said in the prepared remarks, the great job that the team's done and the capital discipline that we have as a company.

Paul J. Lawrence: So overall, to your question of the volume, Satish, I think it will be a little less than what you indicated just given the commissioning ongoing and really we will expect to start the true commissioning and the startup activities near the end of the first quarter. So we will probably be a little under 200 thousand tons of production in the current year.

Satish Kasinathan: Okay. Thank you for the color.

Peter R. Matt: Thank you.

Operator: The next question is from Bill Peterson with JPMorgan. Please go ahead.

Bill Peterson: Yes. Hi, good morning. Thanks for taking the questions. And again, a really strong finish to the fiscal year. Wanted to come back to precast, if I could. So I guess from a if you took the quarterly numbers and annualize it, you were ahead of let's say, where you were or what you had talked about at the time of acquisition in terms of sales. But actually behind in terms of EBITDA So I am just trying to get a better sense of what is going on Maybe you can characterize it relative to the market, the markets you are operating in.

It sounds like it is primarily residential, but also it sounds like your pricing is fine, but is there some cost pressures to call out? Is there some mix related areas to call out, on the profitability side? Yeah.

Peter R. Matt: Great question, Bill. And we will try to fill in some of the detail here. So as we said in the prepared remarks, this is really about weakness in residential, and in the Southeast, and it is really about volume weakness. In that region in residential. And what I think is interesting to note is that the volumes are actually if we look at the CP and P portfolio, volumes are up and actually almost offsetting all of the volume decline in the Southeast.

So what that leads to is that you will remember when we announced these transactions that there was a pretty sharp discrepancy between the margins on the Foley portfolio and the margins on the CP and P portfolio. Again, this is 1 of the opportunities in CP and P that we saw as to bring those margins up. But as we are working through the integration, we have not completed that yet. And so losing volumes in the Southeast was kind of painful from it just magnified the EBITDA impact of the lost volume. As I said, the price is not the issue.

The price has been going up We have quarter over quarter price increases and year over year price increases. So, it is very disappointing. it is kind of not how we would have written the script. What I want to be categorically clear about is that we are not overly concerned. As retail as the as the residential has slowed the non residential and the infrastructure have filled in the backlog. Our margins in spite of that volume loss remained at 30%, which is again, this is remember we are on the front end of an acquisition. So we have got some of the integration costs before we get the benefits of integration.

And a lot of the business indicators, I think, point us to confidence here. So bookings, as we noted, up 12.5% in fourth quarter and have continued to rise in the month of September. Pricing again as I noted up backlog up 4% year over year, 3% in the fourth quarter. With growth in September. And the other thing I would say is that the integration is as proceeded in a really nice way. I would say we are, if anything, ahead of plan. Our synergy, as we look at the business more, we see more opportunities to do things with it. That are going to lead to kind of higher growth synergies.

So, So on balance, this is a yes, there is some soft in the market. But 1 other final point that maybe I will leave you with is that the residential portion of our portfolio is running at about 50% to 60% of kind of what a normal environment would be. So, feel like we have taken much if not all of the pain on the residential side. So I am sorry that is a long explanation, but there is a lot to get in there.

Bill Peterson: No, that is good as I appreciate that. Very helpful. So my next question is on North American steel. You commented about NBQ, the mix is rich. It looks like shipments are at least at a 5 year high. So I am trying to get a sense of is there further opportunities to shift more of the mixed to MBQ? And I guess how to take that into account as we look at this fiscal year in terms of the cadence of rebar versus MBQ especially with the West Virginia ramping, which is rebar. So does that mean more AZ2 goes to MBQ, things like that?

Peter R. Matt: Yeah. No. Great question. And we see a nice opportunity in MBQ And remember, 1 of the things that we have talked about over time is the fact that the portfolio that we have gives us latitude not only to control supply demand by producing fewer rebar tons, but also by producing other products This is the perfect example of what we are able to do here. With demand on merchant, which is really kind of a broad based response to overall strength in the economy. And so we have been shipping materially more merchant bar. And as we start West Virginia, what that will do is it will free up South Carolina for example, to produce more merchant products.

So as we said in the Investor Day, we believe that as a starting objective, we think there could be more over time. But as a starting objective, we can get up to a million tons of merchant shipments And that would imply about 150 thousand to 200 thousand tons of incremental merchant shipments. So again, it is a nice margin opportunity in the current environment. And it is a nice way to keep the rebar market tighter.

Paul J. Lawrence: Just 1 thing to add to Peter's comment. When we disclose merchant bar and other that is got our merchant bar and the wire rod principally that we produce at our Florida facility. So there is about 150 thousand tons of wire rod that we are shipping on an annualized basis. So that supplements to the million tons target for merchant bar that we have.

Bill Peterson: Perfect. Thanks again for all the details and color.

Peter R. Matt: Thank you, Bill.

Operator: The next question is from Timna Tanners with Wells Fargo. Please go ahead.

Timna Tanners: Hey, good morning guys.

Peter R. Matt: Hey, Timna.

Timna Tanners: Wanted to touch base on the recent move up in October for No. 1 heavy melt scrap, it looks like $27.50. Does that get fully passed through with the recent increase in rebar prices that you announced? And any thoughts on the timing impact there into the November quarter?

Peter R. Matt: Yes. So thank you, Timna, for the question. It will and we feel confident that as we go into the November quarter you are going to see a kind of a gradually improving top line from a ASP perspective and a gradually improving metal margins. So we believe we will outpace the move in scrap as it filters through our portfolio.

Timna Tanners: Okay. that is helpful. And then secondly, I wanted to shift over to Europe and I know you talked about some recovery there from low levels. A couple of moving parts, of course, you talked about better demand, but also several favorable trade policies. Like, what are you seeing there in terms of how much of that is volume driven and how much of that might be because of better demand and how much of that might be a result of the tariff actions? So I.

Peter R. Matt: What I would say is that the demand is good. And it is been good. In Poland, right. and we have said that on several prior calls, The challenge has been really on the supply side. And that is where we have been optimistic about the impact of some of these trade policies. What we have seen, however, is that so and just kind of rewinding the clock to the beginning of the year, you had CBAM but then kind of when in front of CBAM, everyone imported a lot of steel into Poland.

So we had this 2 to 3 month period where we had to kind of deal with that And then the market started to tighten up and we saw pricing and margins improved. So, felt pretty good about that. And then the safeguards which took effect in July, same impact. Happened where people are kind of bringing material into Poland or into Europe in advance of that. And so, we are kind of working our way through that, but we are optimistic that we are on the way to seeing an improving environment.

The it would be it would be great if we could see some general improvement in the European economy The fact that the German economy has not improved the way we expected it to is maybe a little cautionary note. But we are optimistic that we can get this business back to $100 million or our through-the-cycle number.

Paul J. Lawrence: And Timna, to add a little color, it really is a margin growth that we are looking for to get us to that $100 million level. Within TAG, a good portion of that both in North America and in Europe is commercial excellence. there is a strong commercial excellence process going on in Europe. To really be selective around the volumes that we want to sell that drive the greatest margins for the business. So this is about us realizing a margin enhancement as opposed to a volume growth.

Peter R. Matt: Thank you, Timna.

Operator: The next question is from Nick Cash with Goldman Sachs. Please go ahead.

Nick Cash: Yes. Thank you guys for taking my question. Just stepping back to the Analyst Day for a second, can you help us bridge, I guess, the 26 core EBITDA of, call it, $1.4 billion versus the 2029 target of $1.65 billion to $1.8 billion And can you also remind us, I guess, how much was West Virginia precast TAG and other? And does the Precast weakness that you are currently seeing in the mix shift change that mix at all?

Paul J. Lawrence: Yes. Thanks, Nick. Great question. We believe that we are I think demonstrating the capabilities of the business in the fourth quarter aligned to the targets that we have for 2029. The math of the organic growth projects, whether that be West Virginia, whether that be through the merchant bar expansion that Peter said, whether it be the Galva bar line or the GeoGrid line that we are constructing. All of that is close to $200 million of incremental EBITDA that we have we have talked about there. We have got the ability or the strength in Arizona to continue to enhance the contribution contributions.

We have got the growth in the precast business obviously, where it was in 2026, the full year impact, but also the growth that we anticipate in that business. As well as the mid teens growth in the rest of the Construction Solutions Group. So I think the $1.4 billion that we earned in the fourth quarter, recognizing that the scenario we laid out was a 25% tariff environment. but we are well on our way with all of that growth opportunities to achieve that or in today's environment far exceed the low end of the range based on the way we are performing now in the market that we are seeing.

Peter R. Matt: And Nick, can I just jump in on that to say you asked the question about does the precast softness change at all and I want to categorically say it does not? If anything as I said earlier, we have more conviction in precast and by 2029 we are confident that we are going to get to where we thought we could get to.

Nick Cash: No. that is extremely helpful. Thanks for the color and I will pass it on.

Peter R. Matt: Thank you.

Operator: The next question is from Richard Garchitorena with Barclays. Please go ahead.

Richard Garchitorena: Great. Thanks for taking my question. I believe on the prepared remarks that you mentioned that CapEx for fiscal 27 would be $400 million with 25% of that being growth CapEx. I was wondering if you could provide some color in terms of what are the key growth projects that you are going to be working on this year. Particularly in the CSG and precast? And then how should we think about that impacting potential growth in 2028 fiscal 2028 and beyond?

Paul J. Lawrence: Yes. Thanks, Richard. The vast majority of the $100 million growth is West Virginia. there is a few payments related to performance targets that need to be made and we expect to make those in 2027. So that is well over half of the spend. And then the spend on the GeoGrid line and the GalvaBar line. Both those will. Well, all 3 of those will be in startup mode in 2027. So their EBITDA contribution will be limited as far as the long term capabilities of those plants. We expect the GalvaBar facility begin commissioning late in calendar 26 and the GeoGrid line is continuing to be in the startup and commissioning time now.

So that 1's most likely to contribute in 2027. As Peter said, we expect West Virginia to ramp up nicely and within 6 months of the startup to be breakeven from an EBITDA perspective. So into Q3, for us on that 1.

Peter R. Matt: And we expect just to put a bow on that, again, we think about maintenance, we have talked about maintenance in the past is $275 million. So going forward, if you think about kind of $50 ish million of growth investments, that is the type of range we would be in. For kind of ongoing CapEx. And again, I think that 1 of the things that is really important that we are trying to do across the company is, look for opportunities to invest in projects that make our operations more efficient. And generate kind of high returns from that. So you will see that is where we will devote most of the growth to.

As we have said before, we are not building a new steel mill, anything like that. It will all be investments in efficiency.

Richard Garchitorena: Great. And maybe just sticking to capital allocation, congrats on getting leverage down. Below your target level. As you move forward, obviously CapEx coming down as well. How should we think about share repurchases Is that going to be the bulk of the target or are you looking to keep some dry powder for M&A? How should we think about that?

Peter R. Matt: Yeah. I mean, I think, we are definitely going to keep some dry powder for M&A. If we think about we have built a kind of pretty active M&A dialogue across the priority areas. We do not have anything that is significant to do right now. So but that works fine because we have got a lot of work to still do on integration and optimizing the Precast platform. But again, returns to shareholders are an important piece. And as you heard what Paul said in his prepared remarks about our share repurchase.

And I think looking at our free cash flow and seeing the strength of it, and also looking at the share price and it looks like it is a very compelling investment at this price. It seemed like it made sense to accelerate the share repurchase. We had we announced an authorization of or we increased our authorization to about 700 million with this. We increased it by $600 million, but to get to about a $700 million total authorization We said we intended to do that over 3 years. What we are saying today is we are going to pull that forward.

We will see how that progresses, but I think you should expect a meaningful increase in the amount of shares that we are buying.

Richard Garchitorena: Great. Thank you.

Peter R. Matt: Thank you.

Operator: The next question is from Gresser with BNP Paribas. Please go ahead.

Tristan Gresser: Yes. Thank you for taking my questions. The first 1 is on North America. If we put everything together, West Virginia, the product mix you just mentioned as well. And I do not know if there is some leftover from Arizona II for fiscal 2027. Are you able to share the percentage volume increase you have in mind for the fiscal year for the division? And if you have any is there any difference between steel products and downstream products?

Peter R. Matt: Well, I guess what I would start at with is demand. Right? And so far this year, we have seen demand growing year to date. I think it is over 4% And so the good news is that we have the capability to flex our production to meet increased demand. And yes, there is additional capability in Arizona and there is obviously additional capability in West Virginia. But again, I want to come back remind everyone that our objective is to kind of keep supply and demand in balance and the flexibility of our network, given it is a high variable cost network, allows us to do that.

So I think we will have to see how the market grows, but assuming that it continues at this pace, something of that order could be could be what we would expect. Do not know, Paul, if you would add anything.

Paul J. Lawrence: You know, I think what we are particularly proud about because I think if you look as Peter said, the market is up 4% to 5% in terms of rebar consumption. Our downstream business in which we have executed and demonstrated strong, strong commercial discipline in terms of really only looking to take on margin accretive work for the business and yet we are up 7% on a year-over-year basis over year basis. That speaks to the capabilities and the ability for us to do these large mega jobs that are really sustaining the construction activity right now.

And those are projects that are not just being done in 2026 but will be multi year in length and it gives us confidence as we look forward that those capabilities will be rewarded in terms of lower risk to the contractors, lower risk to the project owners of contracting with CMC and continue to fuel a real sense of opportunity for us to grow margins and continue a strong downstream pull.

Tristan Gresser: All right. No, that is that is very clear. And the second question is on Europe. A bit of the same question to start with on the volume outlook, if you are you expect to continue to gain market share and what we can expect for the year? And also just trying to understand a bit the margin development. You sound pretty constructive, but when I look at rebar prices and maybe I should look at Polish rebar prices and just general European prices, but they are being pretty flat over the past couple of months and energy costs are through the roof. So another long steel producer in the regions have been forced to shut down.

So what are you doing differently Can you remind us how you procure your electricity, natural gas and maybe some your hedging strategy you have in place or maybe there is something different. It just about makes or something else that make you a bit more resilient.

Peter R. Matt: Well, thanks, Tristan. So I am going to start and then Paul can walk you through what we are doing in terms of energy procurement. But in terms of volumes, we that demand is good. And we have been running at, I would say, pretty high rate of utilization in our Polish operation recently. So we. And I would say we expect demand to be, you know, kind of stable, modestly, modestly better in that marketplace. Pricing, you are right, has been well, we saw as I said earlier, we saw in the wake of CBAM, we saw a nice rise in pricing.

To the tune of $100 a ton, but then we saw obviously scrap kind of went up along with it with the safeguards coming in and the pre buy there, you have seen us give some of that a little bit of that back. So we are still optimistic though that as the buy related to the safeguards filters through, that you are going to see margins expand in that market. We are. And again, expand gradually that market. We are not expecting any sea change, so to speak. But maybe Paul, you can talk about the side.

Paul J. Lawrence: Yes. On the cost side, earlier I spoke of the focus that the team is doing on commercial aspects of tag. Operationally, the team has done a phenomenal job of rightsizing and driving costs to where it needs to be from a competitive perspective in the tight market that exists in Europe. And 1 of those areas that the team has always been focused on is electricity consumption. But also having the foresight to enter into longer term energy contracts. And so we have around 50% of our electricity hedged through long term purchase agreements. These were entered into prior to the Ukraine or prior to energy costs taking off in Europe.

And so really competitively situates the mill in positive environment. So combination of a strong hedging process through those agreements as well as a focus on consumption that drives a significant competitive advantage. And hence why we are able to withstand the costs where they are. As I said, we do anticipate energy costs continuing to rise, but we expect to continue to be a strong position economically from a margin perspective with those increases taken into consideration.

Peter R. Matt: And Tristan, the last thing I would just say is just remember as you kind of think forward the next couple of quarters, we are coming into difficult part of the year in terms of the ultimate demand, So there is going to be some likely some seasonality to the to the numbers over the next couple of quarters.

Tristan Gresser: Alright. No. that is that is very clear. 1 quick follow-up. The inventory overhang you mentioned, would you see that clearing up already before year end? Or it is going to take a much longer than that?

Peter R. Matt: Well, again, if we think about I would say what we saw in CBAM took longer than what we expected, to clear up. So and I would say to the tune of probably 4-ish. Yeah. Yeah. 4 to 6. So I think we might see the same here. So by the end of the calendar year, we would expect the benefits really of CBAM and the tariff rate quota to start being realized in a more meaningful way.

Tristan Gresser: Alright. Very clear. Thanks a lot.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Peter R. Matt for any closing remarks.

Peter R. Matt: Well, thank you for the thoughtful questions and for joining us today. Every CMC employee should be proud of what we have accomplished in fiscal 26 and even more excited about the opportunities ahead. Enabled by their efforts and our collective performance and a clear vision we believe fiscal 2027 will be another great year for CMC. To our shareholders, we thank you for your support and we look forward to continuing the conversation over the weeks and months ahead. Have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.