COMMERCIAL METALS Co

Commercial Metals Company operates in the steel manufacturing, metals recycling, and early-stage construction solutions industries, serving infrastructure, non-residential, residential, industrial, and energy markets. The global steel industry is cyclical and highly competitive, consisting of domestic and international producers for all major product lines, and global steelmaking capacity greatly exceeds demand for steel products in many regions around the world, resulting in competition from steel imports into the regions CMC operates ¹. Trade enforcement measures, including tariffs imposed pursuant to Section 232 of the U.S. Trade Expansion Act of 1962, which were restored and expanded on February 10, 2025 ², support domestic production and reduce imports of unfairly priced steel. In the European Union, a new steel import regime became effective on July 1, 2026 ³, replacing the EU's prior steel safeguard measure, establishing tariff-rate quotas and generally imposing a 50% ad valorem duty on imports of covered steel products exceeding applicable quotas ⁴. The EU Carbon Border Adjustment Mechanism entered its transitional phase in October 2023 and its definitive phase on January 1, 2026 ⁵, requiring importers of certain carbon-intensive goods including iron, steel and aluminum to report embedded emissions and ultimately purchase and surrender certificates corresponding to the carbon price that would have applied had the goods been produced within the EU ⁶. The nonferrous recycling industry is highly fragmented in the U.S. ⁷. The industry is subject to seasonality, with net sales generally higher in the third and fourth fiscal quarters due to increased construction activity during spring and summer months ⁸.

CMC believes it is one of the largest manufacturers and fabricators of rebar in the U.S., the largest manufacturer of steel fence posts, and among the largest manufacturers of merchant bar ⁹. In Poland, CMC believes it is the second largest producer of rebar and wire rod, and the largest producer of merchant bar for the products it manufactures ¹⁰. CMC believes its recycling operations are among the largest engaged in the recycling of nonferrous scrap metals in the U.S. ¹¹, and it is also a major regional processor of ferrous scrap metal ¹². The company's vertically integrated manufacturing platform provides an advantageous cost structure, with recycling operations providing scrap metal to steel mills, which in turn supply steel to fabrication operations ¹³. CMC's steel mills and fabrication operations in North America and Europe are well-positioned geographically, with steel mill locations in some of the highest demand locations for rebar and merchant bar consumption ¹⁴. In North America, the network of steel operations stretches from the East Coast to the West Coast and can reach every major metro area in the U.S. ¹⁵. Demand for CMC's products in the U.S. is highest in the Sun Belt region where most of its steel mills are located ¹⁶. The company's mini mill in Poland is well positioned to serve neighboring European economies ¹⁷. As an EU-based steel producer, CMC believes the EU's new steel import regime and CBAM provide a favorable competitive backdrop and structural competitive advantage for its Europe Steel Group segment ¹⁸.

CMC generates revenue through three reportable segments: North America Steel Group, Construction Solutions Group, and Europe Steel Group ¹⁹. The North America Steel Group segment provides a diverse offering of products and solutions to support the construction sector through a vertically integrated network of recycling facilities, steel mills and fabrication operations ²⁰. The Construction Solutions Group segment provides early-stage construction solutions and value-added products to serve domestic and international markets adjacent to those served by the vertically integrated operations ²¹. The Europe Steel Group segment is composed of a vertically integrated network of recycling facilities, an EAF mini mill and fabrication operations located in Poland ²². CMC's business model has been strategically built on sustainable principles, including recycling metals, manufacturing steel products from approximately 98% recycled material using energy-efficient technology and employing closed-loop water recycling processes ²³. In 2026, recycled content made up approximately 98% of the raw materials used in manufactured finished steel ²⁴. CMC serves infrastructure, non-residential, residential, industrial and energy markets ²⁵. The company's products are essential to highways, bridges, airports, commercial buildings and other critical structures ²⁶. CMC's diverse product offerings, scale and capabilities position it as a global solutions provider to the construction industry, capable of addressing multiple stages of the early phases of construction ²⁷.

The North America Steel Group segment includes 41 scrap metal recycling facilities primarily located in the Southeast and Central U.S. ²⁸, which process ferrous and nonferrous scrap metals. These facilities utilize specialized equipment including seven large machines capable of shredding obsolete automobiles or other sources of scrap metal ²⁹, and equipment at three facilities that reclaim metal from insulated copper wire ³⁰. The segment's steel mill operations consist of six EAF mini mills, four EAF micro mills and one rerolling mill ³¹. The fourth EAF micro mill, located in Berkeley County, West Virginia, was placed in service during the fourth quarter of 2026 ³². The fabrication operations include 52 facilities engaged in various aspects of steel fabrication; 49 of these facilities engage in general fabrication of reinforcing steel, including shearing, bending and welding, and three of these facilities fabricate steel fence posts ³³. The segment also has two facilities that supply post-tension cable ³⁴. Downstream products backlog, defined as the total value of unfulfilled orders, was $1.7 billion at August 31, 2026 ³⁵. CMC has invested approximately 79%, 80% and 77% of total capital expenditures in the North America Steel Group segment during 2026, 2025 and 2024, respectively ³⁶.

The Construction Solutions Group segment's portfolio consists of the precast platform and the Emerging Business Group businesses ³⁷. The precast platform includes precast concrete and concrete pipe products, which are construction components formed by pouring concrete into a reusable mold that contains steel reinforcement, then curing it in a controlled manufacturing environment ³⁸. CMC Construction Services operations sell and rent construction-related products and equipment to concrete installers and other businesses in the construction industry ³⁹. Tensar operations sell geogrids and Geopier foundation systems ⁴⁰. CMC Impact Metals operations manufacture heat-treated, high-strength steel products, such as high-strength bar for the truck trailer industry, special bar quality steel for the energy market and armor plate for military vehicles ⁴¹. The group of performance reinforcing steel offerings includes Galvabar, ChromX (designed for high-strength capabilities, corrosion resistance and a service life of more than 100 years) ⁴², and CryoSteel ⁴³. CMC Anchoring Systems' operations supply custom engineered anchor cages, bolts and fasteners ⁴⁴. Through a licensing agreement with InQuik Inc., CMC Bridge Systems is the authorized provider of InQuik Bridges in the U.S. ⁴⁵. The Europe Steel Group segment includes 12 scrap metal recycling facilities located throughout Poland ⁴⁶, a mini mill in Zawiercie, Poland with three rolling lines ⁴⁷, and four steel fabrication facilities located in Poland ⁴⁸. CMC is among the largest manufacturers of wire mesh in Poland ⁴⁹.

During 2026, CMC completed the acquisitions of Foley Products Company, LLC and Concrete Pipe & Precast, LLC, which resulted in the creation of the precast platform ⁵⁰. The Foley Acquisition was completed on December 15, 2025 ⁵¹, and Foley is one of the largest regional suppliers of precast concrete solutions in the U.S. and a leader within the Southeastern U.S. ⁵². The CP&P Acquisition was completed on December 1, 2025 ⁵³, and CP&P is a leading supplier of precast concrete solutions to the U.S. Mid-Atlantic and South Atlantic markets ⁵⁴. Following these acquisitions, CMC changed the name of its Emerging Businesses Group segment to Construction Solutions Group ⁵⁵. The fourth EAF micro mill, located in Berkeley County, West Virginia, was placed in service during the fourth quarter of 2026 ⁵⁶. In 2024, CMC launched its company-wide Transform, Advance, and Grow (

) operational and commercial excellence program ⁵⁷. During 2026, CMC incurred environmental costs, including disposal, permits, license fees, tests, studies, remediation, consultant fees and environmental personnel expense of $62.9 million ⁵⁸, and spent $1.9 million on capital expenditures for environmental projects ⁵⁹. CMC anticipates capital expenditures for new environmental projects during 2027 to be approximately $3.5 million ⁶⁰.

CMC's total net sales for fiscal 2026 were $8.4 billion ⁶¹, compared to $7.9 billion ⁶² in fiscal 2025. Net earnings for fiscal 2026 were $301.4 million ⁶³, compared to $417.4 million ⁶⁴ in fiscal 2025. Diluted earnings per share were $2.66 ⁶⁵ in fiscal 2026, compared to $3.62 ⁶⁶ in fiscal 2025. The company reported $15.4 million of litigation expense in the year ended August 31, 2026 ⁶⁷, which primarily represents the estimate of post-judgment interest on the PSG judgment for the period. In the year ended August 31, 2025, CMC reported $362.3 million of litigation expense ⁶⁸, which represents the Company's estimate based on its understanding of the PSG judgment, PSG's attorneys' fees and other related costs, including post-judgment interest for the period. CMC's Europe Steel Group segment generated approximately 11% of 2026 consolidated net sales ⁶⁹. As of August 31, 2026, CMC had approximately 13,670 employees ⁷⁰, with 7,965 in North America Steel Group ⁷¹, 2,549 in Construction Solutions Group ⁷², 2,749 in Europe Steel Group ⁷³, and 407 in Corporate and Other ⁷⁴.

CMC expects the acquisitions of Foley and CP&P to strategically position it for long-term growth in new and existing customer markets ⁷⁵. The Foley Acquisition aligns with CMC's strategy to pursue inorganic growth by adding scale, margin strength and regional leadership to its precast platform ⁷⁶. The CP&P Acquisition aligns with CMC's strategy to pursue inorganic growth by expanding CMC's portfolio of early-stage construction solutions through the addition of precast capabilities ⁷⁷. The newly acquired precast platform has numerous strategically located facilities across the Southeast and Mid-Atlantic, and the geographic overlap between these facilities and CMC's steel operations allows it to provide additional solutions for early-stage construction ⁷⁸.

CMC's fourth EAF micro mill, located in Berkeley County, West Virginia, was placed in service during the fourth quarter of 2026 ⁷⁹. This facility is strategically located to serve the Northeast, Mid-Atlantic and Mid-Western U.S. markets and is supported by CMC's existing network of downstream fabrication plants ⁸⁰. This facility expands CMC's production capacity for straight-length and spooled rebar and advances its commitment to sustainable steelmaking ⁸¹. The mill employs the latest technology in EAF power supply systems ⁸².

CMC's transformation initiatives aim to improve long-term profitability, lower costs, enhance margins and drive operational efficiency ⁸³. In 2024, CMC launched its company-wide Transform, Advance, and Grow (

) operational and commercial excellence program ⁸⁴. The TAG initiatives may involve significant changes to organizational structures, technology platforms, operational processes and commercial strategies ⁸⁵. CMC may be unable to achieve the expected operational efficiencies and cost savings from its transformation initiatives within the anticipated timeframe, or at all ⁸⁶. If CMC is unable to successfully implement these initiatives, it may fail to achieve its margin improvement targets and projected cost savings ⁸⁷.

CMC's operations are conducted through an extensive manufacturing network primarily located in the United States and Central Europe, with strategic operations in the United Kingdom, Europe and Asia ⁸⁸. The company's vertically integrated manufacturing platform provides an advantageous cost structure and maximizes the results of its steel-related operations ⁸⁹. CMC's recycling operations provide scrap metal to its steel mills, which in turn use the scrap metal to produce and supply steel required by its fabrication operations ⁹⁰. As CMC's recycling facilities are generally located near its steel mills, it can ensure a secure supply of low-cost raw materials, and its fabrication facilities provide a significant and consistent source of demand as well as forward visibility into end customer demand ⁹¹. This is a strategic advantage when imports increase as CMC's steel mills can continue to supply its fabricators ⁹². CMC can adjust production at its mills based on prevailing demand or import trends ⁹³. Contract pricing that is utilized for CMC's recycling and fabrication operations helps to stabilize short-term volatility ⁹⁴.

CMC's capital allocation strategy includes pursuing inorganic growth through acquisitions ⁹⁵. CMC has expanded, and plans to continue to expand, its business by making strategic acquisitions and regularly seeking suitable acquisition targets to enhance its growth ⁹⁶. CMC may fund such acquisitions using cash on hand, drawing under its credit facility or accessing the capital markets ⁹⁷. To the extent CMC finances such acquisitions with additional debt, the incurrence of such debt may result in a significant increase in interest expense and financial leverage ⁹⁸. CMC's share repurchase program may be modified, suspended, extended or terminated by the Company at any time and without notice ⁹⁹. The timing and amount of any repurchases will be determined by CMC's management based on its evaluation of market conditions, capital allocation alternatives and other factors beyond its control ¹⁰⁰.

CMC's business supports cyclical industries such as commercial, government and residential construction, energy, metals service center, petrochemical and original equipment manufacturing ¹⁰¹. CMC may experience significant fluctuations in demand for its products from these industries based on global or regional economic conditions, geo-political conflicts, energy prices, consumer demand and decisions by governments to fund infrastructure projects such as highways, schools, energy plants and airports ¹⁰². Commercial and infrastructure construction activities related to the residential housing market, such as shopping centers, schools and roads, could be adversely impacted by a prolonged slump in new housing construction ¹⁰³. CMC's business, results of operations and financial condition are adversely affected when the industries it serves suffer a prolonged downturn or anemic growth ¹⁰⁴. Because CMC does not have unlimited backlogs, its business, results of operations and financial condition are promptly affected by short-term economic fluctuations ¹⁰⁵.

Global steelmaking capacity exceeds demand for steel products in many regions around the world ¹⁰⁶. Steel production in China, the world's largest producer and consumer of steel, has continued to exceed Chinese demand ¹⁰⁷. This excess capacity in China has resulted in a further increase in imports of artificially low-priced steel and steel products to the U.S. and world steel markets ¹⁰⁸. Countries such as Algeria, Bulgaria, Egypt and Vietnam have also increased their steel exports, particularly of rebar, to the U.S. ¹⁰⁹. Excessive imports of steel into the U.S. have exerted, and may continue to exert, downward pressure on U.S. steel prices ¹¹⁰. Certain of CMC's competitors have announced and are moving ahead with plans to develop new steelmaking capacity in the near term, with a number of ongoing EAF projects in the U.S. and additional capacity expected to come online at various times over the next one to three years ¹¹¹. The addition of new mill production and decreased domestic demand could lead to domestic overcapacity, which could lead to a decrease in steel prices ¹¹².

CMC faces significant risks from global steelmaking overcapacity, with global steelmaking capacity exceeding demand in many regions, resulting in competition from steel imports ¹¹³. Steel production in China, the world's largest producer and consumer of steel, has continued to exceed Chinese demand, resulting in increased imports of artificially low-priced steel to the U.S. and world steel markets ¹¹⁴. Countries such as Algeria, Bulgaria, Egypt and Vietnam have also increased steel exports, particularly of rebar, to the U.S. ¹¹⁵. Certain competitors have announced plans to develop new steelmaking capacity in the U.S., with additional capacity expected to come online over the next one to three years ¹¹⁶. The company is exposed to the PSG litigation, where a jury returned a verdict in favor of PSG in the amount of $110.0 million on November 5, 2024, which the Northern District Court subsequently trebled as a matter of law ¹¹⁷. In the year ended August 31, 2025, CMC reported $362.3 million of litigation expense ¹¹⁸, and in the year ended August 31, 2026, CMC reported $15.4 million of litigation expense ¹¹⁹. Unless the verdict and judgment are overturned or significantly reduced, the cash payments incurred in connection with this litigation would have a significant impact on CMC's liquidity and financial condition ¹²⁰. CMC's operations present significant risk of injury or death, and the company may be unable to avoid material liabilities for injuries or deaths ¹²¹. The company's EAF mills generate electric arc furnace dust, which the EPA and other regulatory authorities classify as hazardous waste ¹²². Approximately 20% of the weight of an automobile hulk consists of material known as shredder fluff ¹²³. If laws, regulations or testing methods change with regard to EAF dust or shredder fluff or other by-products, CMC may incur additional significant costs ¹²⁴.

Management's message to shareholders emphasizes CMC's strategic transformation and growth initiatives, with a focus on operational and commercial excellence through the Transform, Advance, and Grow program launched in 2024 ¹²⁵. The company completed two significant acquisitions during 2026—Foley Products Company, LLC on December 15, 2025 ¹²⁶, and Concrete Pipe & Precast, LLC on December 1, 2025 ¹²⁷—which resulted in the creation of a precast platform and the renaming of the Emerging Businesses Group segment to Construction Solutions Group ¹²⁸. Management believes these acquisitions will strategically position CMC for long-term growth in new and existing customer markets ¹²⁹. The fourth EAF micro mill in Berkeley County, West Virginia, was placed in service during the fourth quarter of 2026 ¹³⁰, expanding production capacity for straight-length and spooled rebar and advancing the company's commitment to sustainable steelmaking ¹³¹. Management's strategic priorities include pursuing value-accretive organic growth that captures available internal synergies and capability-enhancing inorganic growth that broadens the portfolio ¹³². The company aims to provide customers with a broad value-enhancing solution ¹³³. Management emphasizes CMC's vertically integrated manufacturing platform as providing an advantageous cost structure and maximizing the results of steel-related operations ¹³⁴. The company's focus on safety and talent development allows it to run a great company and achieve operational and commercial excellence across its business ¹³⁵. Management notes that CMC provides differentiating value for customers through industry-leading customer service with a low cost, high-quality production process ¹³⁶. The company has achieved market leadership through its commitment to transformation, advancement and long-term growth by investing in its business and in its people ¹³⁷.