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Commercial Metals' CEO Discusses Q2 2012 Results - Earnings Call Transcript

I'm also pleased to announce and to report that our Board of Directors approved our quarterly dividend of $0.12 per share, marking the 190th consecutive quarter of dividends to shareholders.

Though the second fiscal quarter is historically our slowest quarter, we achieved our second highest quarterly adjusted operating profit since the first quarter of fiscal 2009, the start of the current economic recession. Our domestic mill and fabrication selling prices for the second quarter were higher than the prior 2 quarters, and our Americas Mills metal margin continued to increase. Most of our segments had higher volumes than last year's second quarter. We continue to be encouraged as our domestic backlogs have grown in the past 2 quarters.

Our Americas Mills and our International Marketing and Distribution segments led our improved profitability, with the International Mill and Americas Recycling contributing profitably despite some challenges in their markets. All this is to the credit of our operations and business management team.

Our Americas Mills segment had another strong quarter of profitability with adjusted operating profit of $54.4 million compared to last year's second quarter of $10.9 million. Tons shipped, average sales prices and metal margins all improved when compared to the same quarter a year ago and this year's first fiscal quarter. This profitability was achieved in spite of planned outages at certain mills for installation of environmental upgrades and general maintenance.

Our mills operated at roughly 77% of capacity compared to 73% in the second quarter of last year. Also, our new Arizona mill achieved another quarter of profitability.

Our International Marketing and Distribution segment had near record profits with an adjusted operating profit of $26.6 million as compared to $12.4 million in last year's second quarter. The raw materials operating group within this segment was the largest contributor to the increased profitability.

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