TEXTILES.ORG
Tensar parent company Commercial Metals Company (CMC) has announced financial results for its fiscal first quarter ended November 30, 2025, citing strong performance for its geosynthetics products.
Peter Matt, President and Chief Executive Officer, commented, “The first quarter marked an exceptional start to 2026 for CMC as we built on the strategic groundwork laid during fiscal 2025 and continued to advance our goal of meaningfully and sustainably enhancing our financial profile and earnings power. Financial results were bolstered by strong operational and commercial execution across our footprint, which allowed CMC to capitalize on constructive market conditions. We also maintained strong momentum in our TAG program, launching key new initiatives aimed at expanding margins and realizing full value for the industry-leading service we provide. This gives us confidence in our ability to reach or exceed our goal of exiting fiscal 2026 at an annualized run-rate EBITDA benefit of $150 million. Finally, we announced, and subsequently completed, acquisitions of two large precast businesses, establishing a highly profitable and scalable new growth platform that positions CMC to create even more value for existing and new customers.”
Mr. Matt added, “Looking at our first quarter financial results, we achieved substantial improvement on a year-over-year basis. Performance was supported by a solid domestic market environment for both our North America Steel Group and Construction Solutions Group, characterized by stable demand and expanding margins. Steel products metal margins increased sequentially for the third consecutive quarter, reaching their highest level in nearly three years, and have the potential to move higher based on favorable market dynamics. Based on what we see today, and the developing economic trends that should drive construction activity well into the future, we are excited about the long-term outlook and believe CMC’s strategic focus positions us to reap significant benefits.”
First quarter net earnings were $177.3 million, or $1.58 per diluted share, on net sales of $2.1 billion, compared to a prior year period net loss of ($175.7) million, or ($1.54) per diluted share, on net sales of $1.9 billion.
During the first quarter of fiscal 2026, the Company recorded net after-tax charges of $28.9 million, related primarily to expenses associated with the acquisitions of Concrete Pipe and Precast, LLC (“CP&P”) and Foley Products Company, LLC (“Foley”), as well as an unrealized loss on undesignated commodity hedges. The charges also include interest expense on the judgment amount associated with previously disclosed litigation. The net loss recorded for the prior year period included a net after-tax charge of $265.0 million to reflect a verdict reached in the litigation referenced above. Excluding these charges, first quarter adjusted earnings were $206.2 million, or $1.84 per diluted share, compared to adjusted earnings of $86.9 million, or $0.76 per diluted share, in the prior year period. “Adjusted EBITDA,” “core EBITDA,” “core EBITDA margin,” “adjusted earnings” and “adjusted earnings per diluted share” are non-GAAP financial measures. Details, including a reconciliation of each such non-GAAP financial measure to the most directly comparable measure prepared and presented in accordance with GAAP, can be found in the financial tables that follow.
As of November 30, 2025, cash, cash equivalents and restricted cash totaled $3.0 billion and available liquidity was nearly $1.9 billion. During the quarter, CMC repurchased 663,220 shares of common stock valued at $38.9 million in the aggregate. As of November 30, 2025, $166.1 million remained available under the current share repurchase authorization. The cash balance at November 30, 2025 included $2.0 billion in proceeds from an offering of senior notes in November, most of which was earmarked to fund the Company’s purchase of Foley. In December, we closed both the CP&P and Foley acquisitions, making payments of approximately $2.5 billion.
On January 5, 2026, the board of directors declared a quarterly dividend of $0.18 per share of CMC common stock payable to stockholders of record on January 19, 2026. The dividend, to be paid on February 2, 2026, marks the 245th consecutive quarterly payment by the Company.
Business Segments – Fiscal First Quarter 2026 Review
North America Steel Group product demand remained stable during the quarter with average daily shipments of finished steel products virtually unchanged from both the prior year period and the fourth quarter of fiscal 2025. The pipeline of potential future construction projects remained healthy as indicated by CMC’s downstream bidding activity and the elevated level of the Dodge Momentum Index, which measures the value of projects entering the planning phase. Downstream backlog volumes were up modestly on both a year-over-year and sequential basis, driven by good contract award activity for data center, energy, and public works projects. This expansion occurred despite enhanced commercial selectivity relating to project margin goals and risk profile that has led CMC to decline certain project opportunities. Enhanced commercial discipline has contributed to an emerging price recovery in CMC’s downstream backlog as average backlog pricing has trended higher over the last two quarters following an extended period of price contraction. Shipments of merchant products grew compared to the first quarter of fiscal 2025 as CMC increased its ability to serve West Coast customers from its Arizona 2 micro mill.
Margins on steel products maintained an upward trajectory during the quarter, increasing by $53 per ton on a sequential basis. Compared to the fourth quarter of fiscal 2025, the average selling price for steel products improved by $57 per ton, while scrap costs were stable. As a result of solid domestic market dynamics, CMC’s average selling price for steel products has increased by over $145 per ton relative to the monthly low reached in early fiscal 2025.
Adjusted EBITDA for the North America Steel Group increased 57.9% to $293.9 million in the first quarter of fiscal 2026 from $186.2 million in the prior year period, driven by higher margins over scrap costs on steel products as well as positive contributions from CMC’s TAG program, partially offset by lower margins over scrap on downstream products. Adjusted EBITDA margin for the North America Steel Group was 17.7%, up from 12.3% in the first quarter of fiscal 2025.
Beginning in the first quarter of fiscal 2026, the former Emerging Businesses Group (“EBG”) reporting segment has been renamed Construction Solutions Group (“CSG”) to better reflect the business composition and strategic priorities of the segment. This segment includes all businesses previously reported within EBG, and will also include CMC’s new precast concrete business beginning in the second quarter of fiscal 2026. The name change has no impact on CMC’s reporting structure nor on financial information previously reported.
CSG first quarter net sales of $198.3 million increased by 17.0% compared to the prior year period, while Adjusted EBITDA of $39.6 million was up 74.7% year-over-year, marking the best first quarter results in segment history. Improved profitability was driven primarily by continued strength within CMC’s Tensar division, which has benefited from solid demand, enhanced cost efficiency, and targeted commercial initiatives. CMC Construction Services and CMC Impact Metals also contributed to year-over-year EBITDA growth, but those contributions were partially offset by lower results for Performance Reinforcing Steel as compared to the elevated levels of a year ago. Net sales and margins within CMC Construction Services benefited from initiatives to standardize commercial practices and grow store traffic. Indications of future market conditions within CSG remained encouraging with backlogs and quoting activity at healthy levels. Adjusted EBITDA margin of 20.0% was the highest first quarter result on record, improving 6.6 percentage points relative to the prior year period.
Market conditions for the Europe Steel Group softened modestly from the fourth quarter. Demand remained resilient on solid Polish economic growth, which provided outlets for healthy shipping volumes, but average price and margin levels were negatively impacted by import flows. Metal margin declined by $11 per ton sequentially in the first quarter, driven by a $17 per ton decrease in average selling price, which was only partially offset by a $6 per ton reduction in scrap costs. Financial results during the quarter were impacted by annual maintenance outages. The segment continued to benefit from strong management of controllable costs.
Adjusted EBITDA for the Europe Steel Group of $10.9 million in the first quarter of fiscal 2026 was down from $25.8 million in the prior year period, while adjusted EBITDA margin of 4.4% decreased from 12.3% over the same comparison period. The year-over-year decline was driven by a lower CO2 credit, which amounted to $15.6 million during the first quarter of fiscal 2026 compared to $44.1 million received during the first quarter of fiscal 2025. The reduction in the CO2 credit received in the quarter was the result of receiving a portion of the credit during our fourth fiscal quarter of 2025. Excluding this change to the amount of energy cost rebates, adjusted EBITDA improved meaningfully relative to the prior year period as a result of strong shipping volumes and higher metal margins.
Outlook
Mr. Matt said, “We expect consolidated core EBITDA in the second quarter of fiscal 2026 to decline modestly from first quarter levels due to a normal seasonal slowdown within our key markets, the impact of which will be partially offset by the addition of CMC’s recently acquired precast businesses. The Company will recognize several acquisition-related expenses during the second quarter, including transaction fees, debt issuance costs, and customary purchase accounting adjustments, each of which will be excluded from Core EBITDA. Segment adjusted EBITDA for our North America Steel Group is anticipated to be lower sequentially due to normal seasonal volume trends and the impact of planned maintenance outages, while steel products metal margin is expected to remain relatively stable. Financial results for the Construction Solutions Group should improve compared to the first quarter of fiscal 2026 with the contribution of the precast business more than offsetting seasonal weakness across the segment’s other divisions. Europe Steel Group adjusted EBITDA is expected to be approximately breakeven with margin growth potential later in fiscal 2026 when the Carbon Border Adjustment Mechanism (CBAM) takes full effect.”
Mr. Matt added, “The first quarter marked an excellent start to fiscal 2026, and based on where we stand today, CMC is well-positioned to deliver strong results for the remainder of the year. Solid market dynamics, benefits from our TAG program, and effective operational execution are generating momentum in CMC’s existing businesses, which will be supplemented by an estimated $165 million to $175 million of EBITDA contributions from approximately eight and a half months of ownership of the precast businesses in fiscal 2026. Looking out longer-term, we seek to create significant value for our shareholders by remaining focused on executing our strategic plan, which we expect to deliver meaningful and sustained enhancements to our margins, earnings, cash flow generation, and return on capital.”