Cover Page
Cover Page - shares | 3 Months Ended | |
Nov. 30, 2020 | Jan. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-4304 | |
Entity Registrant Name | COMMERCIAL METALS COMPANY | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-0725338 | |
Entity Address, Address Line One | 6565 N. MacArthur Blvd. | |
Entity Address, City or Town | Irving | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75039 | |
City Area Code | 214 | |
Local Phone Number | 689-4300 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CMC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 120,068,330 | |
Entity Central Index Key | 0000022444 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --08-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | ||
Income Statement [Abstract] | |||
Net sales | $ 1,391,803 | $ 1,384,708 | |
Costs and expenses: | |||
Cost of goods sold | 1,174,819 | 1,146,514 | |
Selling, general and administrative expenses | 113,627 | 110,999 | |
Interest expense | 14,259 | 16,578 | |
Asset impairments | 3,594 | 530 | |
Total costs and expenses | 1,306,299 | 1,274,621 | |
Earnings from continuing operations before income taxes | 85,504 | 110,087 | |
Income taxes | 21,593 | 27,332 | |
Earnings from continuing operations | 63,911 | 82,755 | |
Earnings from discontinued operations before income taxes | 250 | 895 | |
Income taxes | 68 | 302 | |
Earnings from discontinued operations | 182 | 593 | |
Net earnings | $ 64,093 | $ 83,348 | |
Basic earnings per share* | |||
Earnings from continuing operations (in USD per share) | [1] | $ 0.53 | $ 0.70 |
Earnings (loss) from discontinued operations (in USD per share) | 0 | 0.01 | |
Net earnings (in USD per share) | 0.54 | 0.70 | |
Diluted earnings per share* | |||
Earnings from continuing operations (in USD per share) | [1] | 0.53 | 0.69 |
Earnings (loss) from discontinued operations (in USD per share) | 0 | 0 | |
Net earnings (in USD per share) | $ 0.53 | $ 0.70 | |
Average basic shares outstanding | 119,762,706 | 118,370,191 | |
Average diluted shares outstanding | 121,128,044 | 119,773,538 | |
[1] | *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 64,093 | $ 83,348 |
Other comprehensive income, net of income taxes: | ||
Foreign currency translation adjustment | (8,388) | 6,924 |
Net unrealized gain (loss) on derivatives: | ||
Unrealized holding gain | 1,164 | 714 |
Reclassification for gain included in net earnings | (54) | (89) |
Net unrealized gain on derivatives | 1,110 | 625 |
Defined benefit obligation: | ||
Amortization of prior services | (13) | (8) |
Defined benefit obligation | (13) | (8) |
Other comprehensive income (loss) | (7,291) | 7,541 |
Comprehensive income | $ 56,802 | $ 90,889 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 465,162 | $ 542,103 |
Accounts receivable (less allowance for doubtful accounts of $8,407 and $9,597) | 869,052 | 880,728 |
Inventories, net | 653,526 | 625,393 |
Prepaid and other current assets | 181,465 | 165,879 |
Total current assets | 2,169,205 | 2,214,103 |
Property, plant and equipment, net | 1,549,385 | 1,571,067 |
Goodwill | 64,275 | 64,321 |
Other noncurrent assets | 233,803 | 232,237 |
Total assets | 4,016,668 | 4,081,728 |
Current liabilities: | ||
Accounts payable | 252,953 | 266,102 |
Accrued expenses and other payables | 339,545 | 461,012 |
Current maturities of long-term debt and short-term borrowings | 20,701 | 18,149 |
Total current liabilities | 613,199 | 745,263 |
Deferred income taxes | 142,686 | 130,810 |
Other noncurrent liabilities | 260,991 | 250,706 |
Long-term debt | 1,064,893 | 1,065,536 |
Total liabilities | 2,081,769 | 2,192,315 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock | 1,290 | 1,290 |
Additional paid-in capital | 348,816 | 358,912 |
Accumulated other comprehensive loss | (111,055) | (103,764) |
Retained earnings | 1,857,513 | 1,807,826 |
Less treasury stock 8,992,643 and 9,839,759 shares at cost | (161,877) | (175,063) |
Stockholders' equity | 1,934,687 | 1,889,201 |
Stockholders' equity attributable to noncontrolling interests | 212 | 212 |
Total stockholders' equity | 1,934,899 | 1,889,413 |
Total liabilities and stockholders' equity | $ 4,016,668 | $ 4,081,728 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8,407 | $ 9,597 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares outstanding | 120,068,021 | 119,220,905 |
Treasury stock, shares | 8,992,643 | 9,839,759 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Cash flows from (used by) operating activities: | ||
Net earnings | $ 64,093 | $ 83,348 |
Adjustments to reconcile net earnings to cash flows from (used by) operating activities: | ||
Depreciation and amortization | 41,799 | 40,947 |
Deferred income taxes and other long-term taxes | 11,720 | 27,939 |
Stock-based compensation | 9,062 | 8,269 |
Asset impairments | 3,594 | 530 |
Amortization of acquired unfavorable contract backlog | (1,523) | (8,331) |
Net gain on disposals of subsidiaries, assets and other | (69) | (6,733) |
Other | 30 | 645 |
Changes in operating assets and liabilities | (140,794) | (196) |
Net cash flows from (used by) operating activities | (12,088) | 146,418 |
Cash flows from (used by) investing activities: | ||
Capital expenditures | (37,201) | (45,559) |
Proceeds from the sale of property, plant and equipment | 743 | 9,651 |
Proceeds from insurance | 0 | 784 |
Net cash flows used by investing activities: | (36,458) | (35,124) |
Cash flows from (used by) financing activities: | ||
Repayments of long-term debt | (3,823) | (53,298) |
Proceeds from accounts receivable programs | 4,487 | 27,050 |
Repayments under accounts receivable programs | (4,487) | (31,057) |
Dividends | (14,406) | (14,238) |
Stock issued under incentive and purchase plans, net of forfeitures | (10,341) | (7,817) |
Net cash flows used by financing activities | (28,570) | (79,360) |
Effect of exchange rate changes on cash | (365) | 196 |
Increase (decrease) in cash, restricted cash and cash equivalents | (77,481) | 32,130 |
Cash, restricted cash and cash equivalents at beginning of period | 467,483 | 225,859 |
Cash, restricted cash and cash equivalents at end of period | 467,483 | 225,859 |
Supplemental information: | ||
Cash paid for income taxes | 4,743 | 2,119 |
Cash paid for interest | 18,691 | 20,031 |
Noncash activities: | ||
Liabilities related to additions of property, plant and equipment | $ 20,246 | $ 17,569 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2020 | Nov. 30, 2019 |
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 465,162 | $ 224,797 |
Restricted cash | 2,321 | 1,062 |
Total cash, restricted cash and cash equivalents | $ 467,483 | $ 225,859 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interests |
Beginning balance at Aug. 31, 2019 | $ 1,624,057 | $ 1,290 | $ 358,668 | $ (124,126) | $ 1,585,379 | $ (197,350) | $ 196 |
Beginning balance, shares at Aug. 31, 2019 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Aug. 31, 2019 | (11,135,726) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 83,348 | 83,348 | |||||
Other comprehensive income (loss) | 7,541 | 7,541 | |||||
Dividends | (14,238) | (14,238) | |||||
Issuance of stock under incentive and purchase plans, net of forfeitures | (7,817) | (20,282) | $ 12,465 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 724,927 | ||||||
Stock-based compensation | 6,296 | 6,296 | |||||
Reclassification of share-based liability awards | 2,510 | 2,510 | |||||
Ending balance at Nov. 30, 2019 | 1,701,697 | $ 1,290 | 347,192 | (116,585) | 1,654,489 | $ (184,885) | 196 |
Ending balance, shares at Nov. 30, 2019 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at Nov. 30, 2019 | (10,410,799) | ||||||
Beginning balance at Aug. 31, 2020 | $ 1,889,413 | $ 1,290 | 358,912 | (103,764) | 1,807,826 | $ (175,063) | 212 |
Beginning balance, shares at Aug. 31, 2020 | 129,060,664 | ||||||
Beginning balance, treasury stock, shares at Aug. 31, 2020 | (9,839,759) | (9,839,759) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 64,093 | 64,093 | |||||
Other comprehensive income (loss) | (7,291) | (7,291) | |||||
Dividends | (14,406) | (14,406) | |||||
Issuance of stock under incentive and purchase plans, net of forfeitures | (10,341) | (23,527) | $ 13,186 | ||||
Issuance of stock under incentive and purchase plans, net of forfeitures, shares | 847,116 | ||||||
Stock-based compensation | 8,011 | 8,011 | |||||
Reclassification of share-based liability awards | 5,420 | 5,420 | |||||
Ending balance at Nov. 30, 2020 | $ 1,934,899 | $ 1,290 | $ 348,816 | $ (111,055) | $ 1,857,513 | $ (161,877) | $ 212 |
Ending balance, shares at Nov. 30, 2020 | 129,060,664 | ||||||
Ending balance, treasury stock, shares at Nov. 30, 2020 | (8,992,643) | (8,992,643) |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share (in USD per share) | $ 0.12 | $ 0.12 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Accounting policies | NOTE 1. ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2020 ("2020 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2020 Form 10-K. The results of operations for the three month period are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to a year refers to the fiscal year ended August 31st of that year, unless otherwise noted. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 on September 1, 2020. ASU 2019-12 did not have a material effect on the Company's condensed consolidated financial statements. |
CHANGES IN BUSINESS
CHANGES IN BUSINESS | 3 Months Ended |
Nov. 30, 2020 | |
Business Combinations [Abstract] | |
Changes in Business | NOTE 2. CHANGES IN BUSINESS Facility Closures and Dispositions In October 2019, the Company closed the melting operations at its Rancho Cucamonga facility, which is part of the North America segment. In August 2020, the Company announced plans to sell the Rancho Cucamonga site and the Company ceased production in December 2020. Due to these announcements, the Company recorded $8.0 million and $6.3 million of expense in the three months ended November 30, 2020 and 2019, respectively, related to asset impairments, severance, pension curtailment and vendor agreement terminations. As of November 30, 2020, the disposition does not meet the criteria for discontinued operations or held for sale accounting. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Nov. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income (loss) | NOTE 3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"): Three Months Ended November 30, 2020 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, September 1, 2020 $ (87,933) $ (11,334) $ (4,497) $ (103,764) Other comprehensive income (loss) before reclassifications (8,388) 1,437 (20) (6,971) Amounts reclassified from AOCI — (67) — (67) Income taxes — (260) 7 (253) Net other comprehensive income (loss) (8,388) 1,110 (13) (7,291) Balance, November 30, 2020 $ (96,321) $ (10,224) $ (4,510) $ (111,055) Three Months Ended November 30, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, September 1, 2019 $ (121,498) $ 1,106 $ (3,734) $ (124,126) Other comprehensive income (loss) before reclassifications 6,924 882 (10) 7,796 Amounts reclassified from AOCI — (110) — (110) Income taxes — (147) 2 (145) Net other comprehensive income (loss) 6,924 625 (8) 7,541 Balance, November 30, 2019 $ (114,574) $ 1,731 $ (3,742) $ (116,585) Items reclassified out of AOCI were immaterial for the three months ended November 30, 2020 and 2019. Thus, the corresponding line items in the condensed consolidated statements of earnings to which the items were reclassified are not presented. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | NOTE 4. REVENUE RECOGNITION Each fabricated product contract sold by the North America segment represents a single performance obligation. Revenue from contracts where the Company provides fabricated product and installation services is recognized over time using an input measure, and these contracts represented 14% and 12% of net sales in the North America segment in three months ended November 30, 2020 and 2019, respectively. Revenue from contracts where the Company does not provide installation services is recognized over time using an output measure, and these contracts represented 9% and 11% of net sales in the North America segment in three months ended November 30, 2020 and 2019, respectively. The remaining 77% of net sales in the North America segment were recognized at a point in time concurrent with the transfer of control, or as amounts were billed to the customer under an available practical expedient, in three months ended November 30, 2020 and 2019. The following table provides information about assets and liabilities from contracts with customers. (in thousands) November 30, 2020 August 31, 2020 Contract assets (included in accounts receivable) $ 46,430 $ 53,275 Contract liabilities (included in accrued expenses and other payables) 26,462 25,450 The amount of revenue reclassified from August 31, 2020 contract liabilities during the three months ended November 30, 2020 was approximately $13.1 million. Remaining Performance Obligations As of November 30, 2020, $679.8 million has been allocated to remaining performance obligations in the North America segment related to those contracts where revenue is recognized using an input or output measure. |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Nov. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, net | NOTE 5. INVENTORIES, NET The majority of the Company's inventories are in the form of semi-finished and finished goods. Under the Company’s business model, products are sold to external customers in various stages, from semi-finished billets through fabricated steel, leading these categories to be combined. As such, at November 30, 2020 and August 31, 2020, work in process inventories were immaterial. At November 30, 2020 and August 31, 2020, the Company's raw materials inventories were $152.0 million and $123.9 million, respectively. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 3 Months Ended |
Nov. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | NOTE 6. GOODWILL AND OTHER INTANGIBLES Goodwill by reportable segment at November 30, 2020 is detailed in the following table: (in thousands) North America Europe Consolidated Goodwill, gross* $ 71,941 $ 2,530 $ 74,471 Accumulated impairment losses* (10,036) (160) (10,196) Goodwill, net* $ 61,905 $ 2,370 $ 64,275 _________________ * The change in balance from August 31, 2020 was immaterial. The total gross carrying amounts of the Company's intangible assets subject to amortization were $21.8 million and $22.1 million, and the total net carrying amounts were $12.0 million and $12.6 million at November 30, 2020 and August 31, 2020, respectively. These assets were included in other noncurrent assets on the Company's condensed consolidated balance sheets. Intangible amortization expense from continuing operations related to such intangible assets was immaterial for the three months ended November 30, 2020 and 2019. Excluding goodwill, the Company did not have any significant intangible assets with indefinite lives at November 30, 2020. At November 30, 2020 and August 31, 2020, the net carrying amount of the acquired unfavorable contract backlog liability was $4.5 million and $6.0 million, respectively. Amortization of the acquired unfavorable contract backlog was $1.5 million and $8.3 million for the three months ended November 30, 2020 and 2019, respectively, and was recorded as an increase t o net sales in the Company’s condensed consolidated statements of earnings. |
LEASES
LEASES | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Operating Leases | NOTE 7. LEASES The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet: (in thousands) Classification in Condensed Consolidated Balance Sheets November 30, 2020 August 31, 2020 Assets: Operating assets Other noncurrent assets $ 117,582 $ 114,905 Finance assets Property, plant and equipment, net 53,561 50,642 Total leased assets $ 171,143 $ 165,547 Liabilities: Operating lease liabilities: Current Accrued expenses and other payables $ 27,030 $ 27,604 Long-term Other noncurrent liabilities 98,881 95,810 Total operating lease liabilities 125,911 123,414 Finance lease liabilities: Current Current maturities of long-term debt and short-term borrowings 15,060 14,373 Long-term Long-term debt 37,421 35,851 Total finance lease liabilities 52,481 50,224 Total lease liabilities $ 178,392 $ 173,638 The components of lease cost were as follows: Three Months Ended November 30, (in thousands) 2020 2019 Operating lease expense $ 8,722 $ 8,790 Finance lease expense: Amortization of assets 3,239 2,165 Interest on lease liabilities 555 401 Total finance lease expense 3,794 2,566 Variable and short term-lease expense 4,962 3,933 Total lease expense $ 17,478 $ 15,289 The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table: November 30, 2020 August 31, 2020 Weighted-average remaining lease term (years) Operating leases 6.5 6.3 Finance leases 3.8 3.8 Weighted-average discount rate Operating leases 4.426 % 4.283 % Finance leases 4.302 % 4.270 % Cash flow and other information related to leases is included in the following table: Three Months Ended November 30, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 9,047 $ 8,746 Operating cash outflows from finance leases 560 336 Financing cash outflows from finance leases 3,795 3,298 Right of use ("ROU") assets obtained in exchange for lease obligations: Operating leases 12,267 6,369 Finance leases 6,300 5,312 Maturities of lease liabilities at November 30, 2020 are presented in the following table: (in thousands) Operating Leases Finance Leases Year 1 $ 32,040 $ 17,018 Year 2 26,550 14,639 Year 3 22,686 12,374 Year 4 17,312 9,542 Year 5 12,889 3,294 Thereafter 35,301 163 Total lease payments 146,778 57,030 Less: Imputed interest 20,867 4,549 Present value of lease liabilities $ 125,911 $ 52,481 |
Finance Leases | NOTE 7. LEASES The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet: (in thousands) Classification in Condensed Consolidated Balance Sheets November 30, 2020 August 31, 2020 Assets: Operating assets Other noncurrent assets $ 117,582 $ 114,905 Finance assets Property, plant and equipment, net 53,561 50,642 Total leased assets $ 171,143 $ 165,547 Liabilities: Operating lease liabilities: Current Accrued expenses and other payables $ 27,030 $ 27,604 Long-term Other noncurrent liabilities 98,881 95,810 Total operating lease liabilities 125,911 123,414 Finance lease liabilities: Current Current maturities of long-term debt and short-term borrowings 15,060 14,373 Long-term Long-term debt 37,421 35,851 Total finance lease liabilities 52,481 50,224 Total lease liabilities $ 178,392 $ 173,638 The components of lease cost were as follows: Three Months Ended November 30, (in thousands) 2020 2019 Operating lease expense $ 8,722 $ 8,790 Finance lease expense: Amortization of assets 3,239 2,165 Interest on lease liabilities 555 401 Total finance lease expense 3,794 2,566 Variable and short term-lease expense 4,962 3,933 Total lease expense $ 17,478 $ 15,289 The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table: November 30, 2020 August 31, 2020 Weighted-average remaining lease term (years) Operating leases 6.5 6.3 Finance leases 3.8 3.8 Weighted-average discount rate Operating leases 4.426 % 4.283 % Finance leases 4.302 % 4.270 % Cash flow and other information related to leases is included in the following table: Three Months Ended November 30, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 9,047 $ 8,746 Operating cash outflows from finance leases 560 336 Financing cash outflows from finance leases 3,795 3,298 Right of use ("ROU") assets obtained in exchange for lease obligations: Operating leases 12,267 6,369 Finance leases 6,300 5,312 Maturities of lease liabilities at November 30, 2020 are presented in the following table: (in thousands) Operating Leases Finance Leases Year 1 $ 32,040 $ 17,018 Year 2 26,550 14,639 Year 3 22,686 12,374 Year 4 17,312 9,542 Year 5 12,889 3,294 Thereafter 35,301 163 Total lease payments 146,778 57,030 Less: Imputed interest 20,867 4,549 Present value of lease liabilities $ 125,911 $ 52,481 |
CREDIT ARRANGEMENTS
CREDIT ARRANGEMENTS | 3 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit arrangements | NOTE 8. CREDIT ARRANGEMENTS Long-term debt was as follows: (in thousands) Weighted Average Interest Rate at November 30, 2020 November 30, 2020 August 31, 2020 2027 Notes 5.375% $ 300,000 $ 300,000 2026 Notes 5.750% 350,000 350,000 2023 Notes 4.875% 330,000 330,000 Poland Term Loan 1.720% 39,944 40,713 Other 5.100% 21,329 21,329 Finance leases 52,481 50,224 Total debt 1,093,754 1,092,266 Less debt issuance costs 8,160 8,581 Total amounts outstanding 1,085,594 1,083,685 Less current maturities of long-term debt 20,701 18,149 Long-term debt $ 1,064,893 $ 1,065,536 The Company had no amounts drawn under its $350.0 million revolving credit facility (the "Revolver") at November 30, 2020 and August 31, 2020. The availability under the Revolver was reduced by outstanding stand-by letters of credit totaling $3.0 million a t November 30, 2020 and August 31, 2020. The Company has a Term Loan facility (the "Poland Term Loan") through its subsidiary, CMC Poland Sp. zo.o. (“CMCP”), which allows for a maximum aggregate principal amount of Polish zloty ("PLN") 250.0 million, or $66.6 million, at November 30, 2020. At November 30, 2020 and August 31, 2020 , PLN 150.0 million, or $39.9 million, and PLN 150.0 million, or $40.7 million, respectively, was outstanding. The Company also has credit facilities in Poland through its subsidiary CMCP. At November 30, 2020, CMCP's credit facilities totaled PLN 275.0 million, or $73.2 million. These facilities expire in March 2022. No amounts were outstanding under these facilities as of November 30, 2020 or August 31, 2020. The available balance of these credit facilities was reduced by outstanding stand-by letters of credit, guarantees, and/or other financial assurance instruments, which totaled $0.8 million at November 30, 2020 and August 31, 2020. The Company's debt agreements require compliance with certain non-financial and financial covenants, including an interest coverage ratio and a debt to capitalization ratio. At November 30, 2020, the Company was in compliance with all covenants contained in its debt agreements. Accounts Receivable Facilities The Company had no advance payments outstanding under its U.S. accounts receivable facility at November 30, 2020 or August 31, 2020. |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Nov. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | NOTE 9. DERIVATIVES The Company's global operations and product lines expose it to risks from fluctuations in metal commodity prices, foreign currency exchange rates, interest rates and natural gas, electricity and other energy prices. One objective of the Company's risk management program is to mitigate these risks using derivative instruments. The Company enters into (i) metal commodity futures and forward contracts to mitigate the risk of unanticipated changes in gross margin due to price volatility in these commodities, (ii) foreign currency forward contracts that match the expected settlements for purchases and sales denominated in foreign currencies and (iii) energy derivatives to mitigate the risk related to price volatility of electricity and natural gas. At November 30, 2020, the notional values of the Company's foreign currency and commodity commitments were $257.8 million and $203.3 million, respectively. At August 31, 2020, the notional values of the Company's foreign currency and commodity contract commitments were $138.5 million and $195.8 million, respectively. The following table provides information regarding the Company's commodity contract commitments at November 30, 2020: Commodity Long/Short Total Aluminum Long 1,900 MT Copper Long 714 MT Copper Short 8,686 MT Electricity Long 2,000,000 MW(h) _________________ MT = Metric Ton MW(h) = Megawatt hour The Company designates only those contracts which closely match the terms of the underlying transaction as hedges for accounting purposes. Certain foreign currency and commodity contracts were not designated as hedges for accounting purposes, although management believes they are essential economic hedges. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value | NOTE 10. FAIR VALUE The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined within the Summary of Significant Accounting Policies footnote in our 2020 Form 10-K. The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using (in thousands) November 30, 2020 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 394,943 $ 394,943 $ — $ — Commodity derivative assets (2) 291 291 — — Foreign exchange derivative assets (2) 1,329 — 1,329 — Liabilities: Commodity derivative liabilities (2) 19,496 5,882 — 13,614 Foreign exchange derivative liabilities (2) 1,555 — 1,555 — Fair Value Measurements at Reporting Date Using (in thousands) August 31, 2020 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 449,824 $ 449,824 $ — $ — Commodity derivative assets (2) 202 202 — — Foreign exchange derivative assets (2) 1,484 — 1,484 — Liabilities: Commodity derivative liabilities (2) 19,000 3,993 — 15,007 Foreign exchange derivative liabilities (2) 459 — 459 — _________________ (1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options. (2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Derivative liabilities classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives. The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs in which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The floating rate is the only significant unobservable input used in the Company's discounted cash flow model. November 30, 2020 Unobservable Inputs Low High Average Floating rate (PLN) 151.66 247.56 203.96 Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time may cause volatility in the fair value estimate and is the primary reason for the unrealized gain in other comprehensive income ("OCI") in the three months ended November 30, 2020. (in thousands) November 30, 2020 Balance at September 1, 2020 $ (15,007) Total gains, realized and unrealized Recognized in OCI (1) 1,393 Ending balance $ (13,614) _________________ (1) Gains recognized in OCI are included in the unrealized holding gain on the condensed consolidated statements of comprehensive income. There were no material non-recurring fair value remeasurements during the three months ended November 30, 2020 or 2019. The carrying values of the Company's short-term items approximate fair value. The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows: November 30, 2020 August 31, 2020 (in thousands) Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value 2027 Notes (1) Level 2 $ 300,000 $ 317,835 $ 300,000 $ 319,377 2026 Notes (1) Level 2 350,000 365,803 350,000 367,374 2023 Notes (1) Level 2 330,000 348,813 330,000 345,335 Poland Term Loan (2) Level 2 39,944 39,944 40,713 40,713 _________________ (1) The fair value of the notes was determined based on indicated market values. (2) The Poland Term Loan contains variable interest rates, and as a result, the carrying value approximates fair value. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 3 Months Ended |
Nov. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation plans | NOTE 11. STOCK-BASED COMPENSATION PLANS The Company's stock-based compensation plans are described in Note 15, Stock-Based Compensation Plans, to the consolidated financial statements in the 2020 Form 10-K. In general, restricted stock units granted in 2021 vest ratably over a period of three years. Subject to the achievement of performance targets established by the Compensation Committee of CMC's Board of Directors, performance stock units granted in 2021 vest after a period of three years. During the three months ended November 30, 2020 and 2019, the Company granted the following awards under its stock-based compensation plans: November 30, 2020 November 30, 2019 (in thousands, except per share data) Shares Granted Weighted Average Grant Date Fair Value Shares Granted Weighted Average Grant Date Fair Value Equity method 1,399 $ 20.39 1,465 $ 18.15 Liability method 324 N/A 426 N/A During the three months ended November 30, 2020 and 2019, the Company recorded immaterial mark-to-market adjustments on liability awards. At November 30, 2020, the Company had outstanding 715,970 equivalent shares accounted for under the liability method. The Company expects 680,171 equivalent shares to vest. The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was primarily included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings: Three Months Ended November 30, (in thousands) 2020 2019 Stock-based compensation expense $ 9,062 $ 8,269 |
STOCKHOLDERS EQUITY AND EARNING
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE | 3 Months Ended |
Nov. 30, 2020 | |
Earnings Per Share [Abstract] | |
Stockholder's equity and earnings per share | NOTE 12. STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE The calculations of basic and diluted earnings per share from continuing operations were as follows: Three Months Ended November 30, (in thousands, except share data) 2020 2019 Earnings from continuing operations $ 63,911 $ 82,755 Basic earnings per share: Shares outstanding for basic earnings per share 119,762,706 118,370,191 Basic earnings per share from continuing operations $ 0.53 $ 0.70 Diluted earnings per share: Shares outstanding for basic earnings per share 119,762,706 118,370,191 Effect of dilutive securities: Stock-based incentive/purchase plans 1,365,338 1,403,347 Shares outstanding for diluted earnings per share 121,128,044 119,773,538 Diluted earnings per share from continuing operations $ 0.53 $ 0.69 Anti-dilutive shares not included above were immaterial for all periods presented. Restricted stock is included in the number of shares of common stock issued and outstanding, but omitted from the basic earnings per share calculation until the shares vest. During the first quarter of 2015, CMC's Board of Directors authorized a share repurchase program under which CMC may repurchase up to $100.0 million of shares of common stock. During the three months ended November 30, 2020, CMC did not repurchase any shares of common stock. CMC had remaining authorization to repurchase $27.6 million of common stock at November 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | NOTE 13. COMMITMENTS AND CONTINGENCIES Legal and Environmental Matters In the ordinary course of conducting its business, the Company becomes involved in litigation, administrative proceedings and governmental investigations, including environmental matters. See Note 19, Commitments and Contingencies, to the consolidated financial statements in the 2020 Form 10-K. The Company has received notices from the U.S. Environmental Protection Agency ("EPA") or state agencies with similar responsibility that it is considered a potentially responsible party at several sites, none of which are owned by the Company, and may be obligated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") or similar state statutes to conduct remedial investigations, feasibility studies, remediation and/or removal of alleged releases of hazardous substances or to reimburse the EPA for such activities. The Company is involved in litigation or administrative proceedings with regard to several of these sites in which the Company is contesting, or at the appropriate time may contest, its liability at the sites. In addition, the Company has received information requests with regard to other sites which may be under consideration by the EPA as potential CERCLA sites. Some of these environmental matters or other proceedings may result in fines, penalties or judgments being assessed against the Company. At November 30, 2020 and August 31, 2020, the Company had $0.5 million and $0.7 million accrued for cleanup and remediation costs in connection with CERCLA sites, respectively. The estimation process is based on currently available information which is, in many cases, preliminary and incomplete. Total environmental liabilities, including CERCLA sites, were $3.2 million and $3.4 million at November 30, 2020 and August 31, 2020, respectively, of which $2.5 million and $2.7 million were classified as other long-term liabilities at November 30, 2020 and August 31, 2020, respectively. These amounts have not been discounted to their present values. Due to evolving remediation technology, changing regulations, possible third-party contributions, the inherent shortcomings of the estimation process and other factors, amounts accrued could vary significantly from amounts paid. Historically, the amounts the Company has ultimately paid for such remediation activities have not been material. Management believes that adequate provisions have been made in the Company's condensed consolidated financial statements for the potential impact of these contingencies, and that the outcomes of the suits and proceedings described above, and other |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
Business segments | NOTE 14. BUSINESS SEGMENTS The Company structures its business into the following two reportable segments: North America and Europe. See Note 1, Nature of Operations, in the 2020 Form 10-K for more information about the reportable segments, including the types of products and services from which each reportable segment derives its net sales. Corporate and Other contains earnings or losses on assets and liabilities related to the Company's Benefit Restoration Plan assets and short-term investments, expenses of the Company's corporate headquarters, interest expense related to its long-term debt and intercompany eliminations. The following is a summary of certain financial information from continuing operations by reportable segment: Three Months Ended November 30, 2020 (in thousands) North America Europe Corporate and Other Continuing Operations Net sales $ 1,195,013 $ 194,596 $ 2,194 $ 1,391,803 Adjusted EBITDA 155,634 14,470 (26,471) 143,633 Total assets at November 30, 2020* 2,871,933 526,023 618,712 4,016,668 Three Months Ended November 30, 2019 (in thousands) North America Europe Corporate and Other Continuing Operations Net sales $ 1,216,720 $ 165,389 $ 2,599 $ 1,384,708 Adjusted EBITDA 174,732 11,359 (26,286) 159,805 Total assets at August 31, 2020 * 2,862,805 532,850 686,073 4,081,728 _________________ *Total assets listed in Corporate and Other includes assets from discontinued operations. The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations: Three Months Ended November 30, (in thousands) 2020 2019 Earnings from continuing operations $ 63,911 $ 82,755 Interest expense 14,259 16,578 Income taxes 21,593 27,332 Depreciation and amortization 41,799 40,941 Asset impairments 3,594 530 Amortization of acquired unfavorable contract backlog (1,523) (8,331) Adjusted EBITDA from continuing operations $ 143,633 $ 159,805 Disaggregation of Revenue The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended November 30, 2020 (in thousands) North America Europe Corporate Total Major product: Raw material products $ 210,237 $ 2,830 $ — $ 213,067 Steel products 457,657 151,455 — 609,112 Downstream products 437,029 34,473 — 471,502 Other 90,090 5,427 2,605 98,122 Net sales-unaffiliated customers 1,195,013 194,185 2,605 1,391,803 Intersegment net sales, eliminated on consolidation — 411 (411) — Net sales $ 1,195,013 $ 194,596 $ 2,194 $ 1,391,803 Three Months Ended November 30, 2019 (in thousands) North America Europe Corporate Total Major product: Raw material products $ 181,623 $ 2,205 $ — $ 183,828 Steel products 441,163 129,744 — 570,907 Downstream products 499,727 28,200 — 527,927 Other 94,207 4,891 2,948 102,046 Net sales-unaffiliated customers 1,216,720 165,040 2,948 1,384,708 Intersegment net sales, eliminated on consolidation — 349 (349) — Net sales $ 1,216,720 $ 165,389 $ 2,599 $ 1,384,708 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Accounting principles | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") on a basis consistent with that used in the Annual Report on Form 10-K for the year ended August 31, 2020 ("2020 Form 10-K") filed by Commercial Metals Company ("CMC," and together with its consolidated subsidiaries, the "Company") with the Securities and Exchange Commission (the "SEC") and include all normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets and the condensed consolidated statements of earnings, comprehensive income, cash flows and stockholders' equity for the periods indicated. These notes should be read in conjunction with the consolidated financial statements included in the 2020 Form 10-K. The results of operations for the three month period are not necessarily indicative of the results to be expected for the full fiscal year. Any reference in this Form 10-Q to a year refers to the fiscal year ended August 31st of that year, unless otherwise noted. |
Recent accounting pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 eliminates certain exceptions to the general principles in Accounting Standards Codification 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 on September 1, 2020. ASU 2019-12 did not have a material effect on the Company's condensed consolidated financial statements. |
Fair value measurement | The Company has established a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. These levels are determined based on the lowest level input that is significant to the fair value measurement. Levels within the hierarchy are defined within the Summary of Significant Accounting Policies footnote in our 2020 Form 10-K. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following tables reflect the changes in accumulated other comprehensive income (loss) ("AOCI"): Three Months Ended November 30, 2020 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, September 1, 2020 $ (87,933) $ (11,334) $ (4,497) $ (103,764) Other comprehensive income (loss) before reclassifications (8,388) 1,437 (20) (6,971) Amounts reclassified from AOCI — (67) — (67) Income taxes — (260) 7 (253) Net other comprehensive income (loss) (8,388) 1,110 (13) (7,291) Balance, November 30, 2020 $ (96,321) $ (10,224) $ (4,510) $ (111,055) Three Months Ended November 30, 2019 (in thousands) Foreign Currency Translation Unrealized Gain (Loss) on Derivatives Defined Benefit Obligation Total AOCI Balance, September 1, 2019 $ (121,498) $ 1,106 $ (3,734) $ (124,126) Other comprehensive income (loss) before reclassifications 6,924 882 (10) 7,796 Amounts reclassified from AOCI — (110) — (110) Income taxes — (147) 2 (145) Net other comprehensive income (loss) 6,924 625 (8) 7,541 Balance, November 30, 2019 $ (114,574) $ 1,731 $ (3,742) $ (116,585) |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Information avout Assets and Liabilities from Contracts with Customers | The following table provides information about assets and liabilities from contracts with customers. (in thousands) November 30, 2020 August 31, 2020 Contract assets (included in accounts receivable) $ 46,430 $ 53,275 Contract liabilities (included in accrued expenses and other payables) 26,462 25,450 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | Goodwill by reportable segment at November 30, 2020 is detailed in the following table: (in thousands) North America Europe Consolidated Goodwill, gross* $ 71,941 $ 2,530 $ 74,471 Accumulated impairment losses* (10,036) (160) (10,196) Goodwill, net* $ 61,905 $ 2,370 $ 64,275 _________________ * The change in balance from August 31, 2020 was immaterial. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Schedule of Balance Sheet Components of Leases | The following table presents the components of the total leased assets and lease liabilities and their classification in the Company's condensed consolidated balance sheet: (in thousands) Classification in Condensed Consolidated Balance Sheets November 30, 2020 August 31, 2020 Assets: Operating assets Other noncurrent assets $ 117,582 $ 114,905 Finance assets Property, plant and equipment, net 53,561 50,642 Total leased assets $ 171,143 $ 165,547 Liabilities: Operating lease liabilities: Current Accrued expenses and other payables $ 27,030 $ 27,604 Long-term Other noncurrent liabilities 98,881 95,810 Total operating lease liabilities 125,911 123,414 Finance lease liabilities: Current Current maturities of long-term debt and short-term borrowings 15,060 14,373 Long-term Long-term debt 37,421 35,851 Total finance lease liabilities 52,481 50,224 Total lease liabilities $ 178,392 $ 173,638 |
Lease Cost | The components of lease cost were as follows: Three Months Ended November 30, (in thousands) 2020 2019 Operating lease expense $ 8,722 $ 8,790 Finance lease expense: Amortization of assets 3,239 2,165 Interest on lease liabilities 555 401 Total finance lease expense 3,794 2,566 Variable and short term-lease expense 4,962 3,933 Total lease expense $ 17,478 $ 15,289 The weighted-average remaining lease term and discount rate for operating and finance leases are presented in the following table: November 30, 2020 August 31, 2020 Weighted-average remaining lease term (years) Operating leases 6.5 6.3 Finance leases 3.8 3.8 Weighted-average discount rate Operating leases 4.426 % 4.283 % Finance leases 4.302 % 4.270 % |
Cash Flow and Other Information Related to Leases | Cash flow and other information related to leases is included in the following table: Three Months Ended November 30, (in thousands) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 9,047 $ 8,746 Operating cash outflows from finance leases 560 336 Financing cash outflows from finance leases 3,795 3,298 Right of use ("ROU") assets obtained in exchange for lease obligations: Operating leases 12,267 6,369 Finance leases 6,300 5,312 |
Maturity of Operating Lease Liabilities | Maturities of lease liabilities at November 30, 2020 are presented in the following table: (in thousands) Operating Leases Finance Leases Year 1 $ 32,040 $ 17,018 Year 2 26,550 14,639 Year 3 22,686 12,374 Year 4 17,312 9,542 Year 5 12,889 3,294 Thereafter 35,301 163 Total lease payments 146,778 57,030 Less: Imputed interest 20,867 4,549 Present value of lease liabilities $ 125,911 $ 52,481 |
Maturity of Finance Lease Liabilities | Maturities of lease liabilities at November 30, 2020 are presented in the following table: (in thousands) Operating Leases Finance Leases Year 1 $ 32,040 $ 17,018 Year 2 26,550 14,639 Year 3 22,686 12,374 Year 4 17,312 9,542 Year 5 12,889 3,294 Thereafter 35,301 163 Total lease payments 146,778 57,030 Less: Imputed interest 20,867 4,549 Present value of lease liabilities $ 125,911 $ 52,481 |
CREDIT ARRANGEMENTS (Tables)
CREDIT ARRANGEMENTS (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term debt, including the deferred gain from the termination of the interest rate swaps | Long-term debt was as follows: (in thousands) Weighted Average Interest Rate at November 30, 2020 November 30, 2020 August 31, 2020 2027 Notes 5.375% $ 300,000 $ 300,000 2026 Notes 5.750% 350,000 350,000 2023 Notes 4.875% 330,000 330,000 Poland Term Loan 1.720% 39,944 40,713 Other 5.100% 21,329 21,329 Finance leases 52,481 50,224 Total debt 1,093,754 1,092,266 Less debt issuance costs 8,160 8,581 Total amounts outstanding 1,085,594 1,083,685 Less current maturities of long-term debt 20,701 18,149 Long-term debt $ 1,064,893 $ 1,065,536 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity contract commitments | The following table provides information regarding the Company's commodity contract commitments at November 30, 2020: Commodity Long/Short Total Aluminum Long 1,900 MT Copper Long 714 MT Copper Short 8,686 MT Electricity Long 2,000,000 MW(h) _________________ MT = Metric Ton |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial assets and financial liabilities measured at fair value on a recurring basis | The following tables summarize information regarding the Company's financial assets and financial liabilities that were measured at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using (in thousands) November 30, 2020 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 394,943 $ 394,943 $ — $ — Commodity derivative assets (2) 291 291 — — Foreign exchange derivative assets (2) 1,329 — 1,329 — Liabilities: Commodity derivative liabilities (2) 19,496 5,882 — 13,614 Foreign exchange derivative liabilities (2) 1,555 — 1,555 — Fair Value Measurements at Reporting Date Using (in thousands) August 31, 2020 Quoted Prices in Significant Other Significant Assets: Investment deposit accounts (1) $ 449,824 $ 449,824 $ — $ — Commodity derivative assets (2) 202 202 — — Foreign exchange derivative assets (2) 1,484 — 1,484 — Liabilities: Commodity derivative liabilities (2) 19,000 3,993 — 15,007 Foreign exchange derivative liabilities (2) 459 — 459 — _________________ (1) Investment deposit accounts are short-term in nature, and the value is determined by principal plus interest. The investment portfolio mix can change each period based on the Company's assessment of investment options. (2) Derivative assets and liabilities classified as Level 1 are commodity futures contracts valued based on quoted market prices in the London Metal Exchange or New York Mercantile Exchange. Amounts in Level 2 are based on broker quotes in the over-the-counter market. Derivative liabilities classified as Level 3 are described below. Further discussion regarding the Company's use of derivative instruments is included in Note 9, Derivatives. The fair value estimate of the Level 3 commodity derivative is based on an internally developed discounted cash flow model primarily utilizing unobservable inputs in which there is little or no market data. The Company forecasts future energy rates using a range of historical prices ("floating rate"). The floating rate is the only significant unobservable input used in the Company's discounted cash flow model. November 30, 2020 Unobservable Inputs Low High Average Floating rate (PLN) 151.66 247.56 203.96 |
Fair value, net derivative asset (liability) measured on recurring basis, unobservable input reconciliation | Below is a reconciliation of the beginning and ending balances of the Level 3 commodity derivative recognized in the condensed consolidated statements of comprehensive income. The fluctuation in energy rates over time may cause volatility in the fair value estimate and is the primary reason for the unrealized gain in other comprehensive income ("OCI") in the three months ended November 30, 2020. (in thousands) November 30, 2020 Balance at September 1, 2020 $ (15,007) Total gains, realized and unrealized Recognized in OCI (1) 1,393 Ending balance $ (13,614) _________________ (1) Gains recognized in OCI are included in the unrealized holding gain on the condensed consolidated statements of comprehensive income. |
Financial assets and liabilities not required to be measured at fair value | The carrying values and estimated fair values of the Company's financial assets and liabilities that are not required to be measured at fair value on the condensed consolidated balance sheets were as follows: November 30, 2020 August 31, 2020 (in thousands) Fair Value Hierarchy Carrying Value Fair Value Carrying Value Fair Value 2027 Notes (1) Level 2 $ 300,000 $ 317,835 $ 300,000 $ 319,377 2026 Notes (1) Level 2 350,000 365,803 350,000 367,374 2023 Notes (1) Level 2 330,000 348,813 330,000 345,335 Poland Term Loan (2) Level 2 39,944 39,944 40,713 40,713 _________________ (1) The fair value of the notes was determined based on indicated market values. (2) The Poland Term Loan contains variable interest rates, and as a result, the carrying value approximates fair value. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Based Awards Granted | During the three months ended November 30, 2020 and 2019, the Company granted the following awards under its stock-based compensation plans: November 30, 2020 November 30, 2019 (in thousands, except per share data) Shares Granted Weighted Average Grant Date Fair Value Shares Granted Weighted Average Grant Date Fair Value Equity method 1,399 $ 20.39 1,465 $ 18.15 Liability method 324 N/A 426 N/A |
Schedule of Stock-based Compensation Expense | The following table summarizes total stock-based compensation expense, including fair value remeasurements, which was primarily included in selling, general and administrative expenses on the Company's condensed consolidated statements of earnings: Three Months Ended November 30, (in thousands) 2020 2019 Stock-based compensation expense $ 9,062 $ 8,269 |
STOCKHOLDERS_ EQUITY AND EARNIN
STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Earnings Per Share [Abstract] | |
Calculations of the basic and diluted earnings per share from continuing operations | The calculations of basic and diluted earnings per share from continuing operations were as follows: Three Months Ended November 30, (in thousands, except share data) 2020 2019 Earnings from continuing operations $ 63,911 $ 82,755 Basic earnings per share: Shares outstanding for basic earnings per share 119,762,706 118,370,191 Basic earnings per share from continuing operations $ 0.53 $ 0.70 Diluted earnings per share: Shares outstanding for basic earnings per share 119,762,706 118,370,191 Effect of dilutive securities: Stock-based incentive/purchase plans 1,365,338 1,403,347 Shares outstanding for diluted earnings per share 121,128,044 119,773,538 Diluted earnings per share from continuing operations $ 0.53 $ 0.69 Anti-dilutive shares not included above were immaterial for all periods presented. Restricted stock is included in the number of shares of common stock issued and outstanding, but omitted from the basic earnings per share calculation until the shares vest. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of certain financial information from continuing operations by reportable segment | The following is a summary of certain financial information from continuing operations by reportable segment: Three Months Ended November 30, 2020 (in thousands) North America Europe Corporate and Other Continuing Operations Net sales $ 1,195,013 $ 194,596 $ 2,194 $ 1,391,803 Adjusted EBITDA 155,634 14,470 (26,471) 143,633 Total assets at November 30, 2020* 2,871,933 526,023 618,712 4,016,668 Three Months Ended November 30, 2019 (in thousands) North America Europe Corporate and Other Continuing Operations Net sales $ 1,216,720 $ 165,389 $ 2,599 $ 1,384,708 Adjusted EBITDA 174,732 11,359 (26,286) 159,805 Total assets at August 31, 2020 * 2,862,805 532,850 686,073 4,081,728 _________________ |
Reconciliations of earnings from continuing operations to adjusted operating profit | The following table presents a reconciliation of earnings from continuing operations to adjusted EBITDA from continuing operations: Three Months Ended November 30, (in thousands) 2020 2019 Earnings from continuing operations $ 63,911 $ 82,755 Interest expense 14,259 16,578 Income taxes 21,593 27,332 Depreciation and amortization 41,799 40,941 Asset impairments 3,594 530 Amortization of acquired unfavorable contract backlog (1,523) (8,331) Adjusted EBITDA from continuing operations $ 143,633 $ 159,805 |
Net sales by major product | The following tables display revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Three Months Ended November 30, 2020 (in thousands) North America Europe Corporate Total Major product: Raw material products $ 210,237 $ 2,830 $ — $ 213,067 Steel products 457,657 151,455 — 609,112 Downstream products 437,029 34,473 — 471,502 Other 90,090 5,427 2,605 98,122 Net sales-unaffiliated customers 1,195,013 194,185 2,605 1,391,803 Intersegment net sales, eliminated on consolidation — 411 (411) — Net sales $ 1,195,013 $ 194,596 $ 2,194 $ 1,391,803 Three Months Ended November 30, 2019 (in thousands) North America Europe Corporate Total Major product: Raw material products $ 181,623 $ 2,205 $ — $ 183,828 Steel products 441,163 129,744 — 570,907 Downstream products 499,727 28,200 — 527,927 Other 94,207 4,891 2,948 102,046 Net sales-unaffiliated customers 1,216,720 165,040 2,948 1,384,708 Intersegment net sales, eliminated on consolidation — 349 (349) — Net sales $ 1,216,720 $ 165,389 $ 2,599 $ 1,384,708 |
CHANGES IN BUSINESS (Details)
CHANGES IN BUSINESS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Business Combinations [Abstract] | ||
Facility closure costs | $ 8 | $ 6.3 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI by Components) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ (103,764) | $ (124,126) |
Other comprehensive income before reclassifications | (6,971) | 7,796 |
Amounts reclassified from AOCI | (67) | (110) |
Income taxes | (253) | (145) |
Other comprehensive income (loss) | (7,291) | 7,541 |
Ending balance | (111,055) | (116,585) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (87,933) | (121,498) |
Other comprehensive income before reclassifications | (8,388) | 6,924 |
Amounts reclassified from AOCI | 0 | 0 |
Income taxes | 0 | 0 |
Other comprehensive income (loss) | (8,388) | 6,924 |
Ending balance | (96,321) | (114,574) |
Unrealized Gain (Loss) on Derivatives | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (11,334) | 1,106 |
Other comprehensive income before reclassifications | 1,437 | 882 |
Amounts reclassified from AOCI | (67) | (110) |
Income taxes | (260) | (147) |
Other comprehensive income (loss) | 1,110 | 625 |
Ending balance | (10,224) | 1,731 |
Defined Benefit Obligation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (4,497) | (3,734) |
Other comprehensive income before reclassifications | (20) | (10) |
Amounts reclassified from AOCI | 0 | 0 |
Income taxes | 7 | 2 |
Other comprehensive income (loss) | (13) | (8) |
Ending balance | $ (4,510) | $ (3,742) |
REVENUE RECOGNITION - Revenue R
REVENUE RECOGNITION - Revenue Recognition Method (Details) - Americas Fabrication | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Recognized as Amounts are Billed | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | (77.00%) | 77.00% |
Fabricated Product and Installation Services | Recognized over Time | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | 14.00% | 12.00% |
Fabricated Product without Installation Services | Recognized over Time | ||
Disaggregation of Revenue [Line Items] | ||
Contract as percent of total segment revenue (percent) | 9.00% | 11.00% |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Contract assets (included in other current assets) | $ 46,430 | $ 53,275 |
Contract liabilities (included in accrued expenses and other payables) | 26,462 | $ 25,450 |
Revenue reclassified from contract liabilities | $ 13,100 |
REVENUE RECOGNITION - Remaining
REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Millions | Nov. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 679.8 |
INVENTORIES, NET (Narrative) (D
INVENTORIES, NET (Narrative) (Details) - USD ($) $ in Millions | Nov. 30, 2020 | Aug. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 152 | $ 123.9 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES (Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Goodwill [Line Items] | ||
Goodwill, gross | $ 74,471 | |
Accumulated impairment losses | (10,196) | |
Goodwill, net | 64,275 | $ 64,321 |
North America | ||
Goodwill [Line Items] | ||
Goodwill, gross | 71,941 | |
Accumulated impairment losses | (10,036) | |
Goodwill, net | 61,905 | |
Europe | ||
Goodwill [Line Items] | ||
Goodwill, gross | 2,530 | |
Accumulated impairment losses | (160) | |
Goodwill, net | $ 2,370 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Gross carrying amounts of the intangible assets subject to amortization | $ 21.8 | $ 22.1 | |
Net carrying amount of intangible assets subject to amortization | 12 | 12.6 | |
Carrying amount of acquired unfavorable contract backlog liability | 4.5 | $ 6 | |
Amortization of unfavorable contract backlog | $ 1.5 | $ 8.3 |
LEASES - Balance Sheet Componen
LEASES - Balance Sheet Components (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Assets: | ||
Operating assets | $ 117,582 | $ 114,905 |
Finance assets | 53,561 | 50,642 |
Total leased assets | 171,143 | 165,547 |
Operating lease liabilities: | ||
Current | 27,030 | 27,604 |
Long-term | 98,881 | 95,810 |
Total operating lease liabilities | 125,911 | 123,414 |
Finance lease liabilities: | ||
Current | 15,060 | 14,373 |
Long-term | 37,421 | 35,851 |
Total finance lease liabilities | 52,481 | 50,224 |
Total lease liabilities | $ 178,392 | $ 173,638 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 8,722 | $ 8,790 |
Finance lease expense: | ||
Amortization of assets | 3,239 | 2,165 |
Interest on lease liabilities | 555 | 401 |
Total finance lease expense | 3,794 | 2,566 |
Variable and short term-lease expense | 4,962 | 3,933 |
Total lease expense | $ 17,478 | $ 15,289 |
LEASES - Weighted Average Lease
LEASES - Weighted Average Lease Terms and Discount Rates (Details) | Nov. 30, 2020 | Aug. 31, 2020 |
Leases [Abstract] | ||
Operating leases, remaining term | 6 years 6 months | 6 years 3 months 18 days |
Finance leases, remaining term | 3 years 9 months 18 days | 3 years 9 months 18 days |
Operating leases, weighted average discount rate | 4.426% | 4.283% |
Finance leases, weighted average discount rate | 4.302% | 4.27% |
LEASES - Cash Flow and Other In
LEASES - Cash Flow and Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash outflows from operating leases | $ 9,047 | $ 8,746 |
Operating cash outflows from finance leases | 560 | 336 |
Financing cash outflows from finance leases | 3,795 | 3,298 |
Right of use ("ROU") assets obtained in exchange for lease obligations: | ||
Operating leases | 12,267 | 6,369 |
Finance leases | $ 6,300 | $ 5,312 |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Operating Leases | ||
Year 1 | $ 32,040 | |
Year 2 | 26,550 | |
Year 3 | 22,686 | |
Year 4 | 17,312 | |
Year 5 | 12,889 | |
Thereafter | 35,301 | |
Total lease payments | 146,778 | |
Less: Imputed interest | 20,867 | |
Present value of lease liabilities | 125,911 | $ 123,414 |
Finance Leases | ||
Year 1 | 17,018 | |
Year 2 | 14,639 | |
Year 3 | 12,374 | |
Year 4 | 9,542 | |
Year 5 | 3,294 | |
Thereafter | 163 | |
Total lease payments | 57,030 | |
Less: Imputed interest | 4,549 | |
Present value of lease liabilities | $ 52,481 | $ 50,224 |
CREDIT ARRANGEMENTS (Long-term
CREDIT ARRANGEMENTS (Long-term Debt, Including the Deferred Gain from the Termination of the Interest Rate Swaps) (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,093,754 | $ 1,092,266 |
Less debt issuance costs | 8,160 | 8,581 |
Total amounts outstanding | 1,085,594 | 1,083,685 |
Less current maturities of long-term debt | 20,701 | 18,149 |
Long-term debt | $ 1,064,893 | 1,065,536 |
2027 Notes | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.375% | |
Total debt | $ 300,000 | 300,000 |
2026 Notes | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.75% | |
Total debt | $ 350,000 | 350,000 |
2023 Notes | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 4.875% | |
Total debt | $ 330,000 | 330,000 |
Poland Term Loan | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.72% | |
Total debt | $ 39,944 | 40,713 |
Other | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.10% | |
Total debt | $ 21,329 | 21,329 |
Finance leases | ||
Debt Instrument [Line Items] | ||
Total debt | $ 52,481 | $ 50,224 |
CREDIT ARRANGEMENTS (Narrative)
CREDIT ARRANGEMENTS (Narrative) (Details) | Nov. 30, 2020USD ($) | Nov. 30, 2020PLN (zł) | Aug. 31, 2020USD ($) | Aug. 31, 2020PLN (zł) |
Debt Instrument [Line Items] | ||||
Financial liabilities | $ 1,093,754,000 | $ 1,092,266,000 | ||
CMCP | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility current borrowing capacity | zł | zł 275,000,000 | |||
CMCP | Poland Term Loan | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, amount drawn | 0 | 0 | ||
Revolving credit facility current borrowing capacity | 73,200,000 | |||
Stand by letters of credit outstanding amount | 800,000 | 800,000 | ||
Term loan, maximum principal amount | 66,600,000 | 250,000,000 | ||
Financial liabilities | 39,900,000 | 150,000,000 | 40,700,000 | zł 150,000,000 |
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility, amount drawn | 0 | 0 | ||
Revolving credit facility current borrowing capacity | 350,000,000 | 350,000,000 | ||
Revolving credit facility | Poland Term Loan | ||||
Debt Instrument [Line Items] | ||||
Financial liabilities | 39,944,000 | 40,713,000 | ||
Stand-by letters of credit | ||||
Debt Instrument [Line Items] | ||||
Stand by letters of credit outstanding amount | 3,000,000 | 3,000,000 | ||
U.S. Program | ||||
Debt Instrument [Line Items] | ||||
Advances outstanding under transfer of receivables programs | 0 | 0 | ||
Poland Program | ||||
Debt Instrument [Line Items] | ||||
Transfer of accounts receivable program limit | 58,600,000 | zł 220,000,000 | ||
Advances outstanding under transfer of receivables programs | $ 0 | $ 0 |
DERIVATIVES (Narrative) (Detail
DERIVATIVES (Narrative) (Details) - USD ($) $ in Millions | Nov. 30, 2020 | Aug. 31, 2020 |
Foreign exchange | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 257.8 | $ 138.5 |
Commodity | ||
Derivative [Line Items] | ||
Derivative notional amount | $ 203.3 | $ 195.8 |
DERIVATIVES (Commodity Contract
DERIVATIVES (Commodity Contract Commitments) (Details) MWh in Millions | 3 Months Ended |
Nov. 30, 2020MWht | |
Aluminum | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 1,900 |
Copper | Long | |
Derivative [Line Items] | |
Commodity contract commitments | 714 |
Copper | Short | |
Derivative [Line Items] | |
Commodity contract commitments | 8,686 |
Electricity | Long | |
Derivative [Line Items] | |
Commodity contract commitment, electricity | MWh | 2 |
DERIVATIVES (Derivatives Not De
DERIVATIVES (Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on commodity derivatives accounted for as cash flow hedging instruments | $ 1,164 | $ 714 |
Commodity | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on commodity derivatives accounted for as cash flow hedging instruments | 1,200 | 700 |
Commodity | Cost of goods sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) before income taxes for derivatives not designated as hedges | $ (5,600) | $ (1,300) |
FAIR VALUE (Narrative) (Details
FAIR VALUE (Narrative) (Details) | 3 Months Ended |
Nov. 30, 2020levels | |
Fair Value Disclosures [Abstract] | |
Number of fair value hierarchy | 3 |
FAIR VALUE (Financial Assets an
FAIR VALUE (Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis) (Details) $ in Thousands | Nov. 30, 2020USD ($) | Nov. 30, 2020PLN (zł) | Aug. 31, 2020USD ($) |
Significant Unobservable Inputs (Level 3) | Minimum | Commodity | Valuation Technique, Discounted Cash Flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Energy floating rate | zł | zł 151.66 | ||
Significant Unobservable Inputs (Level 3) | Maximum | Commodity | Valuation Technique, Discounted Cash Flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Energy floating rate | zł | 247.56 | ||
Significant Unobservable Inputs (Level 3) | Average | Commodity | Valuation Technique, Discounted Cash Flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Energy floating rate | zł | zł 203.96 | ||
Fair value, measurements, recurring | Money market investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market investments | $ 394,943 | $ 449,824 | |
Fair value, measurements, recurring | Commodity | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 291 | 202 | |
Derivative liabilities | 19,496 | 19,000 | |
Fair value, measurements, recurring | Foreign exchange | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 1,329 | 1,484 | |
Derivative liabilities | 1,555 | 459 | |
Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market investments | 394,943 | 449,824 | |
Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 291 | 202 | |
Derivative liabilities | 5,882 | 3,993 | |
Fair value, measurements, recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2) | Money market investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market investments | 0 | 0 | |
Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2) | Commodity | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 0 | 0 | |
Fair value, measurements, recurring | Significant Other Observable Inputs (Level 2) | Foreign exchange | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 1,329 | 1,484 | |
Derivative liabilities | 1,555 | 459 | |
Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3) | Money market investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market investments | 0 | 0 | |
Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3) | Commodity | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | 13,614 | 15,007 | |
Fair value, measurements, recurring | Significant Unobservable Inputs (Level 3) | Foreign exchange | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative assets | 0 | 0 | |
Derivative liabilities | $ 0 | $ 0 |
Fair Value (Reconciliation of C
Fair Value (Reconciliation of Commodity Derivative Recognized in Other Comprehensive Income) (Details) - Commodity - Significant Unobservable Inputs (Level 3) $ in Thousands | 3 Months Ended |
Nov. 30, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (15,007) |
Recognized in OCI | 1,393 |
Ending balance | $ (13,614) |
FAIR VALUE (Financial Assets _2
FAIR VALUE (Financial Assets and Liabilities Not Required to Be Measured at Fair Value) (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | $ 1,093,754 | $ 1,092,266 |
2027 Notes | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 300,000 | 300,000 |
2027 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 317,835 | 319,377 |
2026 Notes | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 350,000 | 350,000 |
2026 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 365,803 | 367,374 |
2023 Notes | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 330,000 | 330,000 |
2023 Notes | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 348,813 | 345,335 |
Revolving credit facility | Poland Term Loan | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | 39,944 | 40,713 |
Revolving credit facility | Poland Term Loan | Level 2 | Fair Value | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Financial liabilities | $ 39,944 | $ 40,713 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 9,062 | $ 8,269 |
Equity method awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 1,399,000 | 1,465,000 |
Weighted average grant-date fair value | $ 20.39 | $ 18.15 |
Liability method awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 324,000 | 426,000 |
Equivalent shares outstanding | 715,970 | |
Equivalent shares expected to vest | 680,171 | |
Fiscal 2020 | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years | |
Fiscal 2020 | Performance Stock Units (PSU) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period in years | 3 years |
STOCKHOLDERS EQUITY AND EARNI_2
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Narrative) (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Stock repurchase program, authorized amount | $ 100,000,000 | |
Stock repurchase program, shares purchased (shares) | 0 | |
Stock repurchase program, remaining authorized repurchase amount | $ 27,600,000 |
STOCKHOLDERS EQUITY AND EARNI_3
STOCKHOLDERS EQUITY AND EARNINGS PER SHARE (Calculations of the Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | ||
Earnings Per Share [Abstract] | |||
Earnings from continuing operations | $ 63,911 | $ 82,755 | |
Basic earnings per share: | |||
Shares outstanding for basic earnings per share (shares) | 119,762,706 | 118,370,191 | |
Basic earnings per share attributable to CMC: (in USD per share) | [1] | $ 0.53 | $ 0.70 |
Diluted earnings per share: | |||
Shares outstanding for basic earnings per share (shares) | 119,762,706 | 118,370,191 | |
Effect of dilutive securities: | |||
Stock-based incentive/purchase plans (shares) | 1,365,338 | 1,403,347 | |
Shares outstanding for diluted earnings per share (shares) | 121,128,044 | 119,773,538 | |
Diluted earnings per share attributable to CMC: (in USD per share) | [1] | $ 0.53 | $ 0.69 |
[1] | *Earnings Per Share ("EPS") is calculated independently for each component and may not sum to Net EPS due to rounding |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Millions | Nov. 30, 2020 | Aug. 31, 2020 |
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ 3.2 | $ 3.4 |
Accrued environmental loss contingencies, noncurrent | 2.5 | 2.7 |
CERCLA sites | ||
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ 0.5 | $ 0.7 |
BUSINESS SEGMENTS (Narrative) (
BUSINESS SEGMENTS (Narrative) (Details) | 3 Months Ended |
Nov. 30, 2020segments | |
Segment Reporting [Abstract] | |
Number of reporting segments | 2 |
BUSINESS SEGMENTS (Summary of C
BUSINESS SEGMENTS (Summary of Certain Financial Information from Continuing Operations by Reportable Segment and Major Product) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 1,391,803 | $ 1,384,708 | |
Adjusted EBITDA from continuing operations | 143,633 | 159,805 | |
Total assets | 4,016,668 | $ 4,081,728 | |
Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,391,803 | 1,384,708 | |
Segments | Unaffiliated Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,391,803 | 1,384,708 | |
Segments | Raw material products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 213,067 | 183,828 | |
Segments | Steel Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 609,112 | 570,907 | |
Segments | Downstream products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 471,502 | 527,927 | |
Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 98,122 | 102,046 | |
Segments | Continuing Operations | |||
Segment Reporting Information [Line Items] | |||
Adjusted EBITDA from continuing operations | 143,633 | 159,805 | |
Total assets | 4,016,668 | 4,081,728 | |
Segments | North America | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,195,013 | 1,216,720 | |
Adjusted EBITDA from continuing operations | 155,634 | 174,732 | |
Total assets | 2,871,933 | 2,862,805 | |
Segments | North America | Unaffiliated Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,195,013 | 1,216,720 | |
Segments | North America | Raw material products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 210,237 | 181,623 | |
Segments | North America | Steel Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 457,657 | 441,163 | |
Segments | North America | Downstream products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 437,029 | 499,727 | |
Segments | North America | Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 90,090 | 94,207 | |
Segments | Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 194,596 | 165,389 | |
Adjusted EBITDA from continuing operations | 14,470 | 11,359 | |
Total assets | 526,023 | 532,850 | |
Segments | Europe | Unaffiliated Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 194,185 | 165,040 | |
Segments | Europe | Raw material products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,830 | 2,205 | |
Segments | Europe | Steel Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 151,455 | 129,744 | |
Segments | Europe | Downstream products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 34,473 | 28,200 | |
Segments | Europe | Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,427 | 4,891 | |
Segments | Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,194 | 2,599 | |
Adjusted EBITDA from continuing operations | (26,471) | (26,286) | |
Total assets | 618,712 | $ 686,073 | |
Segments | Corporate | Unaffiliated Customers | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,605 | 2,948 | |
Segments | Corporate | Raw material products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Segments | Corporate | Steel Products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Segments | Corporate | Downstream products | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Segments | Corporate | Other | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,605 | 2,948 | |
Intersegment | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Intersegment | North America | |||
Segment Reporting Information [Line Items] | |||
Net sales | 0 | 0 | |
Intersegment | Europe | |||
Segment Reporting Information [Line Items] | |||
Net sales | 411 | 349 | |
Intersegment | Corporate | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ (411) | $ (349) |
BUSINESS SEGMENTS (Reconciliati
BUSINESS SEGMENTS (Reconciliations of Earnings from Continuing Operations to Adjusted Operating Profit) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Segment Reporting [Abstract] | ||
Earnings from continuing operations | $ 63,911 | $ 82,755 |
Interest expense | 14,259 | 16,578 |
Income taxes | 21,593 | 27,332 |
Depreciation and amortization | 41,799 | 40,941 |
Asset impairments | 3,594 | 530 |
Amortization of acquired unfavorable contract backlog | (1,523) | (8,331) |
Adjusted EBITDA from continuing operations | $ 143,633 | $ 159,805 |