IRVING, Texas, June 23 /PRNewswire-FirstCall/ -- Commercial Metals Company (NYSE: CMC) today reported a net loss of $13.1 million or $0.12 per share on net sales of $1.3 billion for the quarter ended May 31, 2009. This compares with net earnings of $59.5 million or $0.51 per diluted share on net sales of $2.9 billion for the third quarter last year. This year's third quarter included after-tax LIFO income of $29 million or $0.26 per share compared with expense of $83 million or $0.71 per diluted share in last year's third quarter. At quarter end our LIFO reserve totaled $279 million. LIFO is an inventory costing method that assumes the most recent inventory purchases or goods manufactured are sold first which in periods of declining prices results in income that eliminates the effect of deflation from operating results. Changes in LIFO are not writedowns, writeoffs or market adjustments. They are changes in cost components based on an assumption of physical inventory flows.
Net earnings for the nine months ended May 31, 2009 were $13.6 million or $0.12 per diluted share on net sales of $5.3 billion. For the same period last year, net earnings were $168.4 million or $1.43 per diluted share on net sales of $7.3 billion. For the nine months ended May 31, 2009, after-tax LIFO income was $184 million or $1.62 per diluted share compared with an expense of $118 million or $1.00 per diluted share last year.
In response to price declines, demand destruction, and a global liquidity and credit crisis, the Company recorded the following consolidated expenses during the third quarter and the nine months ended May 31, 2009:
Three Months Ended Nine Months Ended
(in millions) 5/31/09 5/31/09
Lower of cost or market inventory
adjustments $27.0 $110.4
Charges relating to contractual
noncompliance 8.9 2.4
Bad debt expense 10.2 33.6
Severance costs 2.8 9.3
Impairment charges - 5.1
Selling, general and administrative expenses in the third quarter included $10.8 million of pre-tax costs associated with the investment in the global deployment of SAP software compared to $18.2 million in last year's third quarter; project to date we have expensed $126.8 million. Other SAP costs of $105.8 million have been capitalized since inception of the project, of which $5.6 was capitalized in the current quarter. By August 31, 2009, we estimate that 58% of the earnings power of CMC will be on SAP. These units have been identified as having the greatest benefits to realize under an integrated system. As of August 31, 2009, our deployment of SAP will be folded into our continuing IT operations and no longer be tracked as a separate project.
General Conditions
CMC Chairman, President and Chief Executive Officer Murray R. McClean said, "Global metal markets may have tested the bottom during the quarter and though some recovery has occurred, the markets, overall, remain fragile. Any volume improvement in the quarter was seasonal and not reflective of any stimulus effect. Destocking appears to be in its last stages; however, end-use demand remains weak. Internationally, Poland remains one of the few countries with a positive GDP; its weak currency discourages imports; however, the lack of demand in traditional export markets minimizes any opportunities to leverage the euro or the U.S. dollar through exports. There are some encouraging developments in China where pricing and consumption are on the rise. Lower prices and lower inventory quantities again triggered LIFO income during the quarter. Our largest commercial exposures remain unwarranted customer contractual noncompliance leading to market claims, price renegotiations, and unexpected inventory positions."
Americas Recycling
McClean said, "Ferrous scrap prices are showing signs of stability as this quarter did not exhibit the tremendous volatility seen since March 2008. Domestic supply remains constrained, customer destocking appears near completion and the best markets are overseas as both break bulk and containerized exports yield better price and volumes. Margin decreases on both ferrous and nonferrous sales in comparison to last year's third quarter are two-thirds attributable to volume and one-third to price. Weak demand is outpaced by even weaker supply with a suffering domestic manufacturing base. The adjusted operating loss of $6.7 million pales compared to the $50.4 million operating profit in the third quarter of last year, but was a considerable improvement over the $36.2 million operating loss of the second quarter. Pre-tax LIFO income of $2.0 million during the quarter compares to $15.2 million of pre-tax LIFO expense in last year's comparable quarter. The average ferrous scrap sales price for the third quarter was $146 per short ton, a 63% decline from last year's third quarter. Nonferrous pricing, on the strength of a recovery in copper, fared somewhat better with an average sales price of $1,556 per short ton, a drop of 52%. Shipments of ferrous scrap totaled 371 thousand tons, a decline of 54% from the third quarter of last year and a level last seen in the second quarter of 2003. Nonferrous shipments totaled 50 thousand tons, down 36% from last year's third quarter, but up 32% from the second quarter. We exported 17% of our ferrous tonnage and 50% of our nonferrous scrap tonnage during the quarter."
Americas Mills
McClean said, "There were mixed trends in the results of our Americas Mills segment for the third quarter. Metal margins, though still at historically strong levels, eroded from the second quarter. Tons shipped increased from the second quarter, but this is more likely seasonal rather than sustainable demand. Most benchmarks compared to the third quarter of last year are down. Rebar continues to exhibit resilience, while merchant products wither. Import competition is limited.
Customers continue to destock, but this is slowing. We have rolled approximately 15% less than we shipped in every quarter this year as we reduce inventories to meet lagging demand. The segment earned adjusted operating profit of $42.1 million compared to $34.0 million in the comparable quarter last year. The continuing decline in prices and quantities in inventory led to pre-tax LIFO income of $16.4 million, compared to $55.3 million of pre-tax LIFO expense last year.
"Our steel mills ran at 58% of capacity this quarter, up from 55% capacity in the second quarter. The steel mills adjusted operating profit of $39.2 million was up 18% compared to the prior year third quarter; pre-tax LIFO income was $17.3 million compared to the prior year third quarter pre-tax LIFO expense of $44.5 million. Our metal margin at $365 per ton was 14% above the third quarter of last year, but down some 19% from the second quarter. The price of ferrous scrap consumed at the mills during the quarter fell 50% compared to last year's third quarter. Our average selling price of $564 was down $154 per ton, while the average selling price for finished goods was down $166 to $583 per ton. Sales volumes declined 37% to 427 thousand tons. Rebar accounted for 58% of tonnage shipped, a consistent percentage throughout the year. The price premium of merchant bar over reinforcing bar averaged $154 per ton, down $103 per ton from the second quarter. On a quarter-to-quarter basis, tonnage melted for the third quarter was down 38% to 396 thousand tons, while tonnage rolled declined 35% to 365 thousand tons. Lower production rates as well as price decreases in some alloys and natural gas resulted in an overall decrease of $22.7 million in electrode, alloys, and energy costs."
McClean continued, "Our copper tube mill reported an adjusted operating profit of $2.9 million compared to $700 thousand in the third quarter of last year, though it recorded pre-tax LIFO expense of only $896 thousand compared to pre-tax LIFO expense of $10.8 million in the prior year third quarter. What strength remains in construction is in education and healthcare."
Americas Fabrication & Distribution
McClean added, "Our Americas Fabrication & Distribution segment reported adjusted operating profit of $17.7 million compared to last year's loss of $22.3 million. The current quarter recorded pre-tax LIFO income of $19.0 million, whereas last year's third quarter suffered a pre-tax LIFO expense of $57.0 million. Consistent with the trend all year, fabrication, rebar, structural, decking, and construction services were profitable, but post and joist incurred losses. Profits were attributable to margin improvements on lower material costs supplying relatively high-priced backlog shipments. Losses in post were caused by high-priced raw material in inventory (used rail) running through production and in joist, fierce competition for dwindling tons. The composite average fab selling price (excluding stock and buyouts) was $1,071 per ton, flat with last year's third quarter, but down $172 per ton from the second quarter of 2009. Our challenge remains in our domestic steel import and distribution business which incurred a substantial loss. The decline in spot pricing coupled with customer liquidity issues has led to unprecedented and unwarranted contract cancellations, market claims, price renegotiations and unanticipated inventory positions. We have taken aggressive action to compel customer compliance, have increased bad debt expense and taken lower of cost or market adjustments on inventory positions."
International Mills
According to McClean, "Weak international steel markets, metal margin compression, mill start-up costs and lower of cost or market inventory adjustments caused by rapidly falling sales prices resulted in an adjusted operating loss of $17.7 million for this segment compared to a $30.7 million profit in the third quarter of last year. On a more positive sequential note, the loss was less than the $24.3 million incurred in the second quarter of 2009, this in spite of local currencies (zloty and kuna) strengthening against both the U.S. dollar and euro during the third quarter. CMC Poland had an adjusted operating loss of $9.2 million in the main attributable to compressed metal margins as the volumes were fairly constant with last year. Encouragingly, the losses were reducing each month of the quarter as shipments increased; absent billets, export markets were not viable. Shipments totaled 328 thousand tons (69 thousand tons of billets) compared to 339 thousand tons (82 thousand tons of billets) in the prior year third quarter. Tons melted were 324 thousand tons compared to 428 thousand tons last year, and tons rolled were 253 thousand tons compared to 284 thousand tons in the prior year third quarter. Average selling prices decreased 31% to PLN 1,172 per ton compared to PLN 1,708. The cost of scrap entering production decreased 33%. The average metal margin decreased 192 PLN from 669 PLN to 477 PLN, a level insufficient for profitability. We successfully rolled 14 thousand tons of material on our newly commissioned wire rod block; during the fourth quarter, we will continue to trial different sizes and grades incurring additional start-up costs.
"Our adjusted operating loss in Croatia for the third quarter was $8.5 million, lower than the second quarter, and including inventory lower of cost or market adjustments," said McClean. "Though not yet evident in the results, the mill has some positive developments. It set a new record for tons shipped this quarter. Our yields have steadily improved during the year; we have successfully completed castings of all major sizes of billets from phase one of our updated melt shop. The installation of the renovated furnace is underway and should be completed late in calendar 2009. During the quarter, we melted 13 thousand tons, rolled 21 thousand tons, and shipped 22 thousand tons."
International Fabrication and Distribution
McClean continued, "The downturn in steel markets is most pronounced in Western Europe and is now in full effect in Australia. Only China and some of its near neighbors appear to be showing signs of recovery. The segment suffered from inventory lower of cost or market adjustments and accruals on contract losses and other charges totalling over pre-tax $20 million. Its adjusted operating loss of $10.1 million was in stark contrast to last year's third quarter profit of $40.3 million. The results of our discontinued operations are reflected in these results which included pre-tax LIFO income of $7.8 million. The segment was not without some positive news - our raw materials import business remained profitable, and we opened a fabrication facility in Zyrardow, Poland, located west of Warsaw."
Financial Condition
McClean said, "We continue to emphasize balance sheet strength, liquidity, quality of assets, and debt covenant compliance. At May 31, 2009, our current ratio was 2.5, we had $1.2 billion of net working capital including $441 million of cash and short-term investments. We have increased our allowance for doubtful accounts to $43 million. Our inventories are conservatively valued on LIFO; at May 31, 2009, the reserve was $279 million. Subsequent to quarter end, we closed on the renegotiation of our domestic accounts receivable securitization agreement. We had not used more than $100 million of its capacity in past years; therefore, to save facility fees, we renewed it for $100 million and extended the maturity until December 2009. We have substantially all our $400 million revolver available in the form of either commercial paper or bank borrowings (only $27.9 million of letters of credit outstanding against it at May 31, 2009). At May 31, 2009, goodwill and intangibles totaled $145.9 million, representing only 4% of total assets. Our debt maturity profile is excellent with no substantial long-term debt payments due until 2013. We have two debt covenant tests associated with our publicly held debt - a debt/capital ratio test and an EBITDA to interest coverage test. The maximum debt / capital is 60%; at May 31, 2009, CMC was 44%. We are required to keep a twelve-month rolling average EBITDA to interest coverage of 2.5 times; for the twelve months ended May 31, 2009, we had coverage of 4.8 times.
"The effective tax rate for the quarter and nine month period varies significantly from the statutory rate due to lower tax rate jurisdictions (predominantly international) incurring losses, profits earned in states with income taxes, and the effect of permanent differences having a greater effect at lower levels of pre-tax income."
Outlook for Fourth Quarter
McClean continued, "We believe for the balance of calendar 2009, market conditions in the U.S. will remain difficult. There is very little evidence of stimulus dollars impacting demand. It is likely in 2010 that the stimulus package will impact infrastructure spending and, thus, demand for steel long products such as rebar. We are seeing some small signs of a pick up in demand. However, this is more a function of seasonality and restocking of certain steel products than a general recovery in demand. We believe destocking of rebar and merchant products is almost over. It is likely that steel prices will stabilize and recover modestly in coming months. Rebar imports are likely to remain modest as U.S. domestic prices remain lower than international prices.
"In Europe, we anticipate market conditions to be even more difficult than in the U.S. The only bright spot is Poland where we anticipate better demand for rebar, merchant products and billets. This is partly due to increased infrastructure spending utilizing mainly EU funds. We are more optimistic about Asia, in general, led by China. China, after a slow start, is on target to achieve 7-8% GDP in 2009. The various stimulus packages and other initiatives introduced by the Chinese government to stimulate demand through domestic consumption and infrastructure spending have taken hold. Both long and flat steel products prices in China are likely to firm further. Other markets in Asia, in particular Southeast Asia, are likely to continue to improve."
McClean concluded, "At CMC, our people, whether in the U.S. or in international markets, continue to perform superbly under difficult market conditions. We believe CMC will weather the crisis better than most due to our strong balance sheet, vertical integration, geographic dispersion and long products focus. We believe prices will stabilize at or near current levels negating the need for further significant inventory valuation adjustments. We estimate that our domestic mills may operate around 65% of capacity in the fourth quarter. Ferrous scrap prices and volumes should increase based on improving export markets and a small pick up in domestic demand. Our fabrication backlogs are likely, in the short term, to reduce further with additional margin pressure due to fewer jobs being awarded. Our industrial products business should remain profitable. Internationally, we are likely to see modest improvements in Poland, as well as in our operations in Asia and Australia. Overall, we anticipate fourth quarter results to be similar to the third quarter."
Conference Call
CMC invites you to listen to a live broadcast of its third quarter 2009 conference call today, Tuesday, June 23, 2009, at 11:00 a.m. ET. The call will be hosted by Murray McClean, Chairman, President and CEO and Bill Larson, Senior Vice President and CFO, and can be accessed via our website at www.cmc.com or at www.streetevents.com. In the event you are unable to listen to the live broadcast, the call will be archived and available for replay within two hours of the webcast. Financial and statistical information presented in the broadcast can be found on CMC's website under "Investor Relations."
Commercial Metals Company and subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.
The news release contains forward-looking statements regarding the outlook for the Company's financial results including net earnings, product pricing and demand, production rates, stimulus spending, inventory and backlog levels, GDP growth and general market conditions. These forward-looking statements generally can be identified by phrases such as the company or its management "expect," "anticipates," "believe," "ought," "should," "likely," "appears," "projected," "forecast," "outlook," "will" or other words or phrases of similar impact. There is inherent risk and uncertainty in any forward-looking statements. Variances will occur and some could be materially different from management's current opinion. Developments that could impact the Company's expectations include construction activity, difficulties or delays in the execution of construction contracts resulting in cost overruns or contract disputes, metals pricing over which the Company exerts little influence, interest rate changes, increased capacity and product availability from competing steel minimills and other steel suppliers including import quantities and pricing, court decisions, industry consolidation or changes in production capacity or utilization, global factors including political and military uncertainties, credit availability, currency fluctuations, energy and supply prices and decisions by governments impacting the level of steel imports, stimulus spending, and pace of overall economic activity, particularly China.
Three months ended Nine months Ended
(Short Tons in Thousands) 5/31/09 5/31/08 5/31/09 5/31/08
Domestic Steel Mill Rebar
Shipments 249 300 712 851
Domestic Steel Mill Structural
and Other Shipments 178 373 538 1,046
CMCZ Shipments 328 339 860 1,010
Total Mill Tons Shipped 755 1,012 2,110 2,907
Average FOB Mill Domestic
Selling Price (Total Sales) $564 $718 $673 $643
Average Cost Domestic Mill
Ferrous Scrap Utilized $199 $399 $251 $316
Domestic Mill Metal Margin $365 $319 $422 $327
Average Domestic Mill Ferrous
Scrap Purchase Price $152 $382 $193 $301
Average FOB Mill CMCZ Selling
Price (Total Sales) $351 $771 $494 $644
Average Cost CMCZ Ferrous Scrap
Utilized $206 $467 $266 $374
CMCZ Mill Metal Margin $145 $304 $228 $270
Average CMCZ Ferrous Scrap
Purchase Price $165 $395 $210 $334
Fab Plant Rebar Shipments 236 278 766 766
Fab Plant Structural, Post,
Joist and Deck Shipments 91 174 334 490
Total Fabrication Tons Shipped 327 452 1,100 1,256
Average Fab Selling Price
(Excluding Stock &
Buyout Sales) $1,071 $1,065 $1,201 $1,035
Domestic Scrap Metal Tons
Processed and Shipped 424 900 1,463 2,520
BUSINESS SEGMENTS
(in thousands)
Three months ended Nine months ended
5/31/09 5/31/08 5/31/09 5/31/08
Net Sales
Americas Recycling $152,439 $628,617 $551,680 $1,532,012
Americas Mills 276,827 519,552 945,601 1,390,152
Americas Fab and
Distribution 484,414 751,869 2,086,689 2,030,059
International Mills 147,782 341,474 508,519 755,538
International Fab and]
Distribution 474,823 1,090,397 1,993,165 2,600,322
Corporate 13,274 4,625 (15,484) 4,541
Eliminations and
Discontinued Operations (208,979) (425,804) (738,590)(1,031,722)
Total Net Sales $1,340,580 $2,910,730 $5,331,580 $7,280,902
Adjusted Operating
Profit (Loss):
Americas Recycling $(6,712) $50,371 $(70,843) $92,882
Americas Mills 42,066 34,044 233,851 158,520
Americas Fab and Distribution 17,714 (22,291) 101,314 507
International Mills (17,687) 30,656 (58,746) 39,730
International Fab and
Distribution (10,126) 40,342 (7,079) 88,609
Corporate and Eliminations (5,647) (26,108) (64,000) (74,612)
COMMERCIAL METALS COMPANY
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands except share data)
Three months ended Nine months ended
5/31/09 5/31/08 5/31/09 5/31/08
Net Sales $1,340,580 $2,910,730 $5,331,580 $7,280,902
Costs and Expenses:
Cost of goods sold 1,147,844 2,617,232 4,709,215 6,489,009
Selling, general and
administrative expenses 169,974 190,882 496,368 498,292
Interest expense 18,464 15,827 62,310 42,285
1,336,282 2,823,941 5,267,893 7,029,586
Earnings from Continuing
Operations Before Income
Taxes and Minority
Interests 4,298 86,789 63,687 251,316
Income Taxes 15,341 27,980 53,115 84,260
Earnings (Loss) from
Continuing Operations
Before Minority
Interests (11,043) 58,809 10,572 167,056
Minority Interests
(Benefit) (370) 277 (487) 540
Net Earnings (Loss)
from Continuing
Operations (10,673) 58,532 11,059 166,516
Earnings (Loss) from
Discontinued Operations
Before Taxes (4,165) 1,501 4,024 3,722
Income Taxes (Benefit) (1,761) 549 1,461 1,815
Net Earnings (Loss) from
Discontinued Operations (2,404) 952 2,563 1,907
Net Earnings (Loss) $(13,077) $59,484 $13,622 $168,423
Basic earnings per share
Earnings (Loss) from
Continuing Operations $(0.10) $0.51 $0.10 $1.44
Earnings (Loss) from
Discontinued Operations $(0.02) $0.01 $0.02 $0.02
Net Earnings (Loss) $(0.12) $0.52 $0.12 $1.46
Diluted earnings per share
Earnings (Loss) from
Continuing Operations $(0.10) $0.50 $0.10 $1.41
Earnings (Loss) from
Discontinued Operations $(0.02) $0.01 $0.02 $0.02
Net Earnings (Loss) $(0.12) $0.51 $0.12 $1.43
Cash dividends per share $0.12 $0.12 $0.36 $0.33
Average basic shares
outstanding 112,191,349 113,607,049 112,398,000 115,438,369
Average diluted shares
outstanding 112,191,349 116,090,369 113,855,406 118,163,737
COMMERCIAL METALS COMPANY
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
May 31, August 31,
2009 2008
Assets:
Current Assets:
Cash and cash equivalents $441,389 $219,026
Accounts receivable, net 710,330 1,369,453
Inventories 745,949 1,400,332
Other 181,329 228,632
Total Current Assets 2,078,997 3,217,443
Net Property, Plant and Equipment 1,269,161 1,154,322
Goodwill 73,700 84,837
Other Assets 260,103 289,769
$3,681,961 $4,746,371
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable - trade $301,459 $838,777
Accounts payable - documentary letters
of credit 190,001 192,492
Accrued expenses and other payables 321,648 563,424
Income taxes payable and deferred
income taxes - 156
Notes payable 2,105 31,305
Current maturities of long-term debt 23,647 106,327
Total Current Liabilities 838,860 1,732,481
Deferred Income Taxes 50,473 50,160
Other Long-Term Liabilities 111,407 124,171
Long-Term Debt 1,184,599 1,197,533
Total Liabilities 2,185,339 3,104,345
Minority Interests 2,434 3,643
Stockholders' Equity 1,494,188 1,638,383
$3,681,961 $4,746,371
COMMERCIAL METALS COMPANY
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine months ended
5/31/09 5/31/08
Cash Flows From (Used by) Operating
Activities:
Net earnings $13,622 $168,423
Adjustments to reconcile net earnings
to cash from (used by) operating
activities:
Depreciation and amortization 116,045 96,594
Minority interests (benefit) (487) 540
Provision for losses on receivables 33,615 4,246
Share-based compensation 12,369 14,802
Net loss on sale of assets and other 388 372
Writedown of inventory 110,411 -
Asset impairment 5,051 530
Changes in Operating Assets and
Liabilities, Net of Acquisitions:
Accounts receivable 677,602 (308,168)
Accounts receivable sold, net (107,978) 47,746
Inventories 473,423 (238,663)
Other assets 64,683 (109,523)
Accounts payable, accrued expenses,
other payables and income taxes (716,579) 272,022
Deferred income taxes (4,099) (13,161)
Other long-term liabilities (9,242) 10,671
Net Cash Flows From (Used By) Operating
Activities 668,824 (53,569)
Cash Flows From (Used by) Investing
Activities:
Capital expenditures (290,318) (227,241)
Purchase of minority interests
in CMC Zawiercie (6) (169)
Proceeds from the sale of property,
plant and equipment & other 2,292 1,460
Acquisitions, net of cash acquired (900) (30,646)
Net Cash Flows Used By Investing
Activities (288,932) (256,596)
Cash Flows From (Used by) Financing
Activities:
Increase (decrease) in documentary
letters of credit (2,491) 58,625
Short-term borrowings, net change (25,611) 34,563
Repayments on long-term debt (102,804) (1,704)
Proceeds from issuance of long
term debt 36,365 35,138
Stock issued under incentive and
purchase plans 1,095 12,569
Treasury stock acquired (18,514) (151,530)
Cash dividends (40,636) (38,322)
Tax benefits from stock plans 1,472 6,674
Net Cash Flows Used By Financing
Activities (151,124) (43,987)
Effect of Exchange Rate Changes on Cash (6,405) 3,455
Increase (Decrease) in Cash and
Cash Equivalents 222,363 (350,697)
Cash and Cash Equivalents at
Beginning of Year 219,026 419,275
Cash and Cash Equivalents at
End of Period $441,389 $68,578
COMMERCIAL METALS COMPANY
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
This press release uses financial statement measures not
derived in accordance with generally accepted accounting principles
(GAAP). Reconciliations to the most comparable GAAP measures are
provided below.
EBITDA:
Earnings before interest expense, income taxes, depreciation and
amortization.
EBITDA is a non-GAAP liquidity measure. It excludes Commercial Metals
Company's largest recurring non-cash charge, depreciation and
amortization. As a measure of cash flow before interest expense, it is one
guideline used to assess the Company's ability to pay its current debt
obligations as they mature and a tool to calculate possible future levels
of leverage capacity. EBITDA to interest is a covenant test in certain of
the Company's note agreements.
Three Months Nine Months
Ended Ended
5/31/09 5/31/09
Net earnings (loss) $(13,077) $13,622
Interest expense 18,482 62,874
Income taxes 13,580 54,576
Depreciation and amortization 37,470 116,045
EBITDA $56,455 $247,117
EBITDA to interest coverage
for the quarter ended for the nine months ended
May 31, 2009: May 31, 2009:
$56,455 / 18,482 = 3.1 $247,117 / 62,874 = 3.9
Total Capitalization:
Total capitalization is the sum of long-term debt, deferred income taxes,
and stockholders' equity. The ratio of debt to total capitalization is a
measure of current debt leverage. The following reconciles total
capitalization at May 31, 2009 to the nearest GAAP measure, stockholders'
equity:
Stockholders' equity $1,494,188
Long-term debt 1,184,599
Deferred income taxes 50,473
Total capitalization $2,729,260
Other Financial Information
Long-term debt to cap ratio as of May 31, 2009:
Debt divided by capitalization
$1,184,599 / 2,729,260 = 43.4%
Total debt to cap plus short-term debt plus notes payable ratio as of
May 31, 2009:
(1,184,599 + 23,647 + 2,105 ) / (2,729,260 + 23,647 + 2,105) = 43.9%
Current ratio as of May 31, 2009:
Current assets divided by current liabilities
$2,078,997 /838,860 = 2.5
