Commercial Metals ends quarter with $228 million of cash, investments

By Lisa Kerner

Charlotte, N.C., Jan. 6 - Commercial Metals Co. ended the first quarter of fiscal 2012 on Nov. 30 with cash and short-term investments of $228 million.

There were no outstanding borrowings against the $400 million revolving credit facility, Commercial Metals reported Friday in its earnings release.

The company said coverage tests under its unused revolver and public debt were met.

In December, Commercial Metals entered into a new five-year credit revolver with a borrowing capacity of $300 million and a $100 million accordion feature and also increased its domestic receivable sales facility capacity to $200 million from $100 million.

The company reported a long-term debt to capitalization ratio for the quarter of 49.3%.

Net earnings up

Net earnings for the first quarter were up substantially at $107 million, or $0.93 per diluted share, compared to net earnings of $700,000, or $0.01 per diluted share, for the first quarter of fiscal 2011.

Commercial Metals' net earnings from continuing operations also increased significantly to $125 million, or $1.07 per diluted share, compared to about $15 million, or $0.13 per diluted share, for the prior-year's first quarter.

First-quarter continuing operations befitted from operating improvements as well as a $102 million tax benefit related to ordinary worthless stock and bad debt deductions from the investment in the company's Croatian subsidiary and after-tax LIFO income of about $16 million.

On Jan. 5, the board of directors declared a quarterly dividend of $0.12, which will be payable to shareholders of record of Jan. 20 on Feb. 3.

Based in Irving, Texas, Commercial Metals manufactures, recycles and markets steel and metal products as well as related materials and services.

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