Hello, and welcome, everyone, to the Full Year and Fourth Quarter Fiscal 2017 Earnings Call for Commercial Metals Company. Today's call is being recorded. After the company's remarks, we'll have a question-and-answer session and we'll have a few instructions at that time. I would like to remind all participants that during the course of this conference call, the company will make statements that provide information other than historical information and will include expectations regarding economic conditions, effects of legislation, U.S. steel import levels, U.S. construction activity, demand for finished steel products, the company's future operations, the company's future results of operations, the commissioning of the company's micro mill in Oklahoma and capital spending. These and other similar statements are considered forward-looking and may involve speculation, and are subject to risks and uncertainties that could cause actual results to differ materially from these expectations. These statements reflect the company's beliefs based on the current conditions, but are subject to certain risks and uncertainties, including those that are described in the Risk Factors section of the company's latest 10-K. Although these statements are based on management's current expectations and beliefs, CMC offers no assurance that these expectations or beliefs will prove to have been correct or actual results may vary materially. All statements are made only as of this date. Except as required by law, CMC does not assume any obligation to update, amend or clarify these statements in connection with future events, changes in assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise. Some numbers presented will be non-GAAP financial measures, and reconciliations for such numbers can be found in the company's earnings release or on the company's website. Unless stated otherwise, all references made to year or quarter-end are references to the company's fiscal year or fiscal quarter. And now, for opening remarks and introductions, I will turn the call over to the President and Chief Executive Officer of Commercial Metals Company, Ms. Barbara Smith.

Thank you, Brendan. Good morning, and welcome to everyone, joining us to review CMC's results for the full year and fourth quarter of fiscal 2017. I will begin the call with highlights for the fiscal year and fourth quarter. Mary Lindsey, will then cover the year and quarter financial information in more detail, and I will conclude our prepared remarks with a discussion of our outlook for the first quarter of fiscal 2018. After which, we will open the call to questions. Before discussing our results, I would like to thank our customers and suppliers for their loyalty to CMC. I'd also like to thank the employees of Commercial Metals for their hard work and diligence in serving our customers. As announced in our earnings release this morning, we reported fiscal year 2017 earnings from continuing operations of $32.6 million or $0.27 per diluted share on net sales of $4.6 billion. We also finished the fiscal year with cash and cash equivalents totaling $252.6 million. Further details on our fourth quarter fiscal -- our fourth fiscal quarter will be described by Mary during the financial update. Also, as noted in our press release on October 24, I'm pleased to report that the Board of Directors declared a quarterly cash dividend of $0.12 per share of CMC common stock for stockholders of record on November 8, 2017. The dividend will be paid on November 22, 2017. This represents CMC's 212th consecutive quarterly dividend. We've been challenged by mother nature over the past couple of months, with hurricanes Harvey and Irma and more recently the wildfires of California. Our first consideration in these natural disasters is to our employees. A number of our employees suffered considerable losses, including homes that need to be rebuilt. We have been working to assist our employees…

Thank you, Barbara, and good morning, everyone. As Barbara mentioned, for the full year of fiscal 2017, we reported earnings from continuing operations of $32.6 million or $0.27 per diluted share, which compares to earnings from continuing operations of $57.9 million or $0.50 per diluted share for 2016. I would like to point out that as a result of the sale of the Cometals raw material division, which closed in the fourth quarter, current and prior results have been reclassified to reflect this division as discontinued operations. The remaining businesses within the International Marketing and Distribution segment continue to be reflected as continuing operations. For the fourth quarter of 2017, CMC reported a loss from continuing operations of $32.7 million or $0.28 per share and income from discontinued operations of $3.1 million or $0.03 per share for a consolidated net loss of $29.5 million or $0.25 per share. Included in the fourth quarter consolidated net loss are after-tax charges of $23.2 million or $0.20 per diluted share related to the exit from the International Marketing and Distribution segment. After-tax charges of $11.6 million or $0.10 related to refinancing activities concluded in the quarter, $5.3 million or $0.05 per share related to severance costs and a loss of $4.5 million or $0.04 on the sale of the Cometals raw material division. Looking at our results by segment for the fourth quarter of fiscal 2017. Our Americas Recycling segment recorded adjusted operating profit of $2.9 million for the fourth quarter of 2017 compared to adjusted operating loss of $45.1 million for the fourth quarter of fiscal 2016. The prior year loss included a pretax long-lived asset impairment charge of $38.9 million. While our fourth quarter 2017 result are lower than the prior sequential quarter, the recycling segment continue to contribute positive margins…

Thank you, Mary. Our first quarter is typically a seasonally slower period as the construction season begins to wind down before the onset of winter months. In addition, as Mary mentioned, we experienced some slowness in certain markets from the effect of the weather-related events in Texas and Florida. This will be temporary, and we generally feel positive about the outlook for demand in both the U.S. and Poland. We are encouraged by the recent focus of the U.S. administration on tax reform and believe that this is the first step to either movement on an infrastructure program or further trade action. While it's too early to tell how or when these policies will be prudent, whilst, we believe that they should provide support to the continued growth of the U.S. economy. The margin compressions experienced in our mills and fabrication business in the U.S. during the most recent quarter will continue to impact us as we enter into fiscal 2018. On the mill side, we have announced some price increases for rebar, and are cautiously optimistic that we will recover some of the margin loss to cost inflation over the coming months. On the fabrication side, as Mary indicated, we are starting to see some increase in rebar fabrication contract booking prices, which we hope represents the bottoming in this market. While it is likely that it will take a number of quarters to recover to historical levels, the results of our selective participation in the fabrication market is at least starting to show some movements in the right direction. In summary, we took some difficult decisions in 2017 to focus our business on its core steel manufacturing operations. I'm confident that redeploying the capital that we've invested in our International Marketing and Distribution of business either to delever or invest further in our manufacturing operation, we will deliver improved returns to our stakeholders. We're also embarking on a simplification of our SG&A processes. As we exit the International Marketing and Distribution business, we are focused on streamlining our core processes to be more sustainable with the remaining business. We're proud of the commitments we make as a company and individuals to our customers, suppliers, shareholders, community and each other and we look forward to continued success in fiscal 2018. Finally, before I open the call up to question, I'd like to note that regarding the recent rumors referencing Commercial Metals and potential acquisitions, we will not comment on rumors and will not address any questions related to speculation with respect to potential transactions. Thank you very much. And at this time, we will now open the call to questions.

We will now begin the question-and-answer session. [Operator instructions] Our first question comes from P.T. Luther with Bank of America Merrill Lynch.

Hi Barbara and Mary. How are you?

Good P.T.

Good. Barbara, I appreciate the comment you had at the end regarding the news that's out there. But I was hoping, if you could maybe speak more broadly with regard to the capital that you're freeing up from exiting M&D. You said, you'd look to cut debt and/or reinvest in the business. And could you maybe just talk a little bit more about where you would be looking to reinvest in the business? Would it be to focus on the mill side or elsewhere within the chain or maybe additional Greenfields or M&A or something like that?

Yes, P.T., I think all of the above. We are always looking for ways to grow the business. Bearing in mind that it needs to be profitable growth. Growth that we can justify sufficient returns over time. I guess, I can speak to the actions that we took last year, where we added some recycling yards to our footprint that will support our South Carolina operation with a secure, reliable low-cost source of raw material. We also acquired a small fabricating operation in Hawaii, where the fabrication market is quite attractive. And we can efficiently ship from Arizona to Hawaii to service the business there. We also added some capability by acquiring Continental Concrete, which gives us post hedging capability in the Eastern region, where we previously already had that capability in the West region. So, beyond that, I guess, I'm not prepared to make any further comments other than to say, we will look across the spectrum of our manufacturing footprint, and we will be very disciplined in our approach, ensuring that we have sufficient returns over time.

Okay. That's helpful. Then if I can switch gears quickly over just to imports and the licensing data and what you're hearing on the ground as well. The recent pickup that you referenced in terms of imports coming in, is that from Turkey or is it from other players? And then as a part of that, I'm curious if there is any sort of new progress or new movement again to review trade case activity, specifically, against Turkey after the disappointing decisions earlier this year or not or if it's really looking towards 232 for some sort of relief?

Yes, P.T., the import situation is something that we monitor carefully on an ongoing basis. And there were recent news reports on the import license data for October. And the license data was up significantly. Sometimes that doesn't always translate into orders coming into the U.S., so we'll wait and see. But we also know that things -- imports lulled a little bit, once the 232 speculation that there was going to be a decision at the end of June. We saw a pause. Of course, that was proceeded by a lot of imports flowing into the U.S., which candidly are still in the supply chain and still being consumed. So, it's hard to predict exactly how that's going to play out. The imports or the licenses and the imports are coming from a broad spectrum of countries. And we continuously review potential actions. Tracy Porter, who I'm sure you know, P.T. is our trade expert, if you will. And he's consistently working with the coalition to review the situation and take action if it's warranted.

Okay. Great. I'll get back in queue. Thanks Barbara.

Thank you, P.T.

Our next question comes from Seth Rosenfeld with Jefferies.

Good morning. Thanks for taking my call. Just a couple of questions, I guess, on your mill segment, and how you view your cost base in this business looking forward. You flagged earlier some of the pressure coming from alloys and also from energy, but given the scale of the shift we saw, the increase we saw in conversion cost quarter-over-quarter. Can you give us a better sense of the mix of various elements that drove that shift? And also, can you confirm, if electrodes contributed to that, if you're buying electrodes on a half year basis or on annual contract basis? I guess, looking ahead into 2018 as well, you did comment that you expect some continued cost pressure for the year ahead. But should we take the Q4 print as the right run rate for a full year 2018 or at least for Q1 or is there going to be some moderation just from a cost perspective?

Okay, that was a long question. So, I'll see, if I captured all of it. And I'll have Mary jump in, if she has anything further to add. But -- so in the quarter, as always, there are number of factors, some being, for example, we had some impact of Hurricane Harvey late in the quarter, where we started to shut down operations in order to be prepared for the storm. And the storm track, as an example, was headed towards San Antonio, in Seguin, so we had to make provisions there. And volumes were, I think, overall, looked sequentially down a little bit, so you get some, so you can't adjust that quickly to changes in volume. Clearly, there has been ongoing inflation in alloys and there's been inflation in energy. We did not see in the fourth quarter, a tremendous impact from electrodes, that's a more recent phenomena. And again, it was heightened after the hurricanes because there were some disruption in needle coke supply. But the electrode situation has been evolving and developing over a period of time. And frankly, electrode prices, if you look at them historically, are at really low, depressed level. So, one would expect that, that there would be some resetting of electrode prices back to a more normal level. But what I would say in all these areas is, this is a phenomena that is impacting the entire industry. It's not a company-specific phenomena and so we're hopeful that price adjustment will flow through to offset some of these inflationary pressures. But as we indicated that there's always a lag around that. And so, you don't get an immediate timing between your price adjustments and the inflationary pressures.

Yes. And -- so thanks. I think, I can answer that. I think it's pretty reasonable to consider that the current level of conversion cost that you've seen in the fourth quarter. And we did have some increases compared to the prior quarters of the year. It's going to be very close to a reasonable run rate for the balance of the year. So, I think that -- I think we're at a level that's probably reasonable for modeling purposes.

Just to clarify on that last point, Mary. Today, if we go for modeling purposes for the remainder of the year for the calendar year, so your fiscal Q1 or are we thinking for the entirety of fiscal 2018? And then also just to clarify, could you, throughout that hurricane there as well is impacting your cost in fiscal Q4. How should we think about the scale of incremental hurricane-related cost into fiscal Q1?

Yes, to clarify the answer, it would be for our entire fiscal year. I think we're going to see conversion cost, perhaps rising very modestly, but not significantly. So, it shouldn't increase much more from where it is now. And there really are no more costs associated with the hurricane situation that we expect to affect us in the balance of the year.

Great. Thank you very much.

Thank you.

Our next question comes from Jorge Beristain with Deutsche Bank. Please go ahead.

Good afternoon. I was just wondering, if you could comment on the general state of the rebar market in the U.S. excluding imports because we've seen from your Durant mill and a few other competitors launching, noticed that they're going to be increasing rebar capacity in the U.S. Do you think that the market is healthy enough to support what could be over a million tons of additions from domestic players? Are you sort of getting ready for what could be a surge in rebar imports from a border wall or some other kind of infrastructure spending that maybe we should be thinking about?

Yes, well, generally, steel consumption grows at the rate of GDP, and we're hopeful that we're going to see better GDP growth going forward. Certainly, the administration agenda is allowing towards that end. And we'll have to see how that agenda plays out. As we said for a long period of time, the need for infrastructure renewal and development in the country is -- the evidence is overwhelming. And the issue has been funding and continues to be the issue. And clearly, the President has an infrastructure agenda that he laid out during the campaign and we believe that, that's still part of his agenda. It, however, is placed in the list of priorities behind things that he's been addressing thus far. So, as I indicated in my remarks, assuming that tax reform is forward and there are decisions made related to tax reform, then these other agenda items that the President laid out prior to taking office around infrastructure and things like the border wall or creating more U.S. jobs and all of those things that are stimulating to the U.S. economy. We're hopeful that those come to fruition and create additional demand. Going back to the Durant decision that was a decision that was taken back in 2015 after a tremendous amount of careful consideration of market demand and demand growth. And it was -- is very specific to this region here in North Texas. And Texas, in general, has been growing at substantial rates over the last number of years. It's a very pro-business state and it's attracted a lot of different companies into the state and in particular, into North Texas. And -- so that thesis still holds, and that was the primary consideration in our decision to build the mill in Durant, Oklahoma. And we remained quite optimistic that we know all the outlets, where the production off of that mill will be satisfied.

Okay. Just maybe, again on 232. Has any thought, if you are aware of, in Washington, been given to simply making the possible imports that would become disallowed under 232 retroactive, as a way to discourage this kind of surge ahead of the potential role change. Has there been any talk about that in Washington?

I think you have to find sources closer to the situation that could speak with authority on that. I think what I would be saying would be purely speculation, so I'd rather not comment on the form of any action under 232. Suffice it to say lots of discussion on all aspects of that initiative.

Okay. So, if I could get 1 last one. And then on fabrication, do you have any visibility of any sequential improvement into 1Q? You mentioned it's going to be seasonally slower for you guys. But you should already obviously, know your metal price, so I was just wondering if there is any hope of -- I thought fab margins have kind of bottomed in 3Q results, and they got a bit sequentially worse. So, I'm just wondering if you're starting to see that things have bottomed in fab?

Yes, I think we'll see not overwhelming improvement, but a slight improvement in that segment's results. I do want to caution and remind that fab is -- carries a backlog and we've been living off of higher price backlog for the prior, let's call it three or four quarters. And any new business that was booked into the backlog over that same period of time is that current prices has lower and more depressed prices. And we're now eating into that lower-priced backlog that could have been booked three or four quarters ago. And so, it's a slow phenomenon when prices begin to fall, fab result stay elevated for a while. And it will also be a slow climb, if prices recover and we replace the lower price backlog with more attractively priced business. But we should see some slight improvement in fab results quarter-over-quarter. I would add because we brought up the seasonality, but just as a reminder, September and October are generally reasonable shipping months, and then when you get into November, you begin to get into holidays and extended outages by our customers and fewer shipping days. And that's also the period because our customers tend to take time out that we try to schedule in our annual maintenance activity. So, you have not only the combination of seasonally slower shipments, we also like to take time to do some of that, while our customers are pausing. And then of course, weather becomes a factor late in the first quarter and on into the second quarter. And particularly, in Poland, we, I think had a pretty mild winter last year. And who knows what this winter season will bring. But we tend to see a bit more seasonality in Poland because they have a more severe winter cycle then kind of our southern footprint.

Our next question comes from Tyler Kenyon with KeyBanc Capital. Please go ahead.

Hey. Good morning, Barbara and Mary.

Good morning, Tyler.

Just with respect to pricing. I just wonder, if you could comment a little bit as to the extent of the success that the market has been willing to accept with respect to the rebar price hikes that have been announced over the preceding few months here. And then also wondering, if you could maybe just parse the rebar market out with some of the current dynamics that you might be seeing in the merchant bar market?

Yes, so there have been, as you know, a couple of different price announcements. And some of that has been holding in the marketplace, and there's also been, of course, raw material escalations as we already spoke about in scrap price changes. The more recent price announcement did not take hold in the marketplace. I'll just leave it at that. So, we will see how things evolve going forward. And maybe that was a reaction to what some folks were seeing in terms of import licenses and not wanting to attract imports into this market any further than what they already are. On the merchant side, it is a bit different. There was a price reset announced by one of the market players. And of course, we always have to look at our situation and be responsive to that. So, I think you're going to see more margin pressure on the merchant side as a result.

Okay. And Mary, just wondering, if there is any way to quantify just the extent of the hit in the fourth quarter, just from the nonferrous hedging loss? And how large will that reversal be in the first quarter here?

Yes, so it was about $2.5 million at a reverse in the first quarter.

Okay. And speaking to just the working capital decline in the quarter. Any sense you could provide us on how much of that decline was attributed to the wind down in IM&D? And kind of what we should be expecting over the next couple of quarters?

Yes, I mean, pretty much what you saw in terms of reduction in working capital was associated with the wind down of M&D and the sale of Cometals. So, from a working-capital perspective, on a going-forward basis, you're going to see normal seasonality as we see every year. And in addition to that, I would also comment that as the Oklahoma mill begins to prepare for production, there will be some development at working capital at the Oklahoma mill, and that could be between $20 million and $35 million.

Our next question comes from Matt Fields with Bank of America.

Just really housekeeping questions from me. What is the pretax amount of the costs associated with the exit of the International Marketing and Distribution segment, which was $23.2 million after-tax?

Yes, so the exit from M&D is about $32.1 million pretax and the loss on the actual sale of the Cometals business is about $6.5 million pretax.

So, I should add those two numbers together?

Yes.

Okay. And then how much...

But don't forget -- I guess, I would make 1 comment there, which is that the $32.1 million is a number that will be reflected in continuing operations. And the $6.5 million number is a number that is reflected in discontinued operations. And as I would kind of looking at some of the comments that came out early this morning, I noticed that there was a failure to combine both continuing operations and discontinuing operations as a comparative to your modeling. I think I saw this kind of across the board, in terms of the fact that is you're considering your model, you guys have of course, and correctly, included both, what's now in this disc op together with continuing op. So, if you would put those 2 together, you're going to get a much more accurate comparison of your modeling to our actual adjusted results.

I'm just trying to reconcile that $2 million of adjusted EBITDA. So, $32 million of continuing ops is in -- the loss from that. And then, how much of those cash versus noncash?

It's -- for the most part, its noncash.

Okay. And then the $7.6 million of impairment charges that you do add back to adjusted EBITDA, is that included in the $32 million loss?

Say that again, I didn't quite understand the question.

So, in the EBITDA reconciliation, to get to $1.9 million of EBITDA, you add back $7.6 million of impairment charges?

Yes, that's right.

Is that included in that $32 million loss on the International Marketing segment?

Yes, it's included.

Okay. And then severance cost that you call out, after tax $5.3 million, what's the pretax amount?

The pretax amount is $8.1 million and that spread -- the bulk of that is in corporate. And the balance of it is spread throughout some of the business segments.

[Operator instructions] Our next question comes from Wayne Atwell with Ascendiant Capital. Please go ahead.

I had two quick questions. Could you give us a reading on the impact that the assets that you've sold will have on your ongoing profitability, if that's possible to do? What you've sold so far and what you're planning on selling? And then second of all, if you could answer the question, it's a terrible shame we had such horrible weather, but what's the impact on your business? One would guess it's going to be a lot of rebuilding. And that should be very positive for your business both in Texas and Florida?

Thank you, Wayne. Let me take the second half, and then I'll let Mary take the first half of your question. I used to live in Florida, so I've lived through several hurricane events and they're devastating. But as you point out, the near-term impact was, we had to shutter our operations and we lost some shipments. And of course, following the aftermath of the storm then projects reopened and shipments proceeded. And fortunately, we really didn't have any -- a very minimal property damage to our operations. Following these kinds of storms and with the magnitude of the damage and the amount of the country that was impacted, the first thing that happens is there is lot of scrap that moves into the market. And certainly, we've seen flows be up in our central region, our coastal region, where hurricane Harvey hit. And you'd see the same phenomenon in Florida, where there was also damage. And then as time goes on, the rebuilding occurs. And having lived through these, every building can take a long period of time. And I mean, seriously, a matter of years. And I was the coastal property owner and it took 3 years to reopen on the island, where we had property. So, it -- that rebuilding generally takes a longer period of time. But certainly, there will be some demand created from that. So, I'll turn it over to Mary for the first half of your question.

Yes, so I think you're trying to understand the impact on our profitability from the exit of the M&D business. And what I would say to that is that, that's a bed of business that's been difficult to predict in terms of its earnings contribution. And if you take a look at last year for example, that segment lost money. This year, they have generated income. So, it's difficult to say. It kind of depends on which year you're talking about. But overall, the revenue side of the house is about $1.3 billion. And if you looked only at this year, you would say there was a considerable amount of EBITDA that was lost. However, if you take a look at the three years prior, you'll see very, very different contributions of income from that business segment. So, as we think about it, we think about the fact that we have been able to redeploy a significant amount of working capital into businesses that are more predictable, generate as a whole positive EBITDA, and we think about it more that way. And so, the difficulty of trying to forecast the results of energy are eliminated from our forward-looking financial statements.

Thank you.

Thanks Wayne.

Our next question comes from Sean Wondrack with Deutsche Bank. Please go ahead.

Most of my questions are -- I'll try to keep it quick, but just surrounding kind of the import situation. As you look at the different steel markets, different markets have been impacted to a different degree. And some have actually recovered to some degree this year, but when I look at infrastructure, rebar and the merchant, it continues to just get crushed by imports. So, I guess, my question is, what have you guys done in the past in terms of kind of pushing for more duties aside from Section 232 even against Turkey? And how -- is it possible to ramp up your efforts to either directly to the administration or through marketing to get people focused on how much this market is getting crushed by imports?

Yes, Sean. Thank you for the question. And we participate in a coalition of all rebar producers or most of the rebar producers within the U.S. And we have a battery of trade lawyers and experts that have been doing this for many, many years. We submit all our data. We don't get to see each other's data that we submitted. And we are constantly reviewing, whether we have all the elements to prove harm and other aspects of filing a case. And when we do file a case, we file as a coalition because there's more strength in that. And so, as we like to say, it's whack-a-mole kind of situation because when you file a case and have some success, for example, against Turkey. And there are differing views on the most recent trade case against Turkey, whether the outcome was positive or negative. It was certainly better than the prior case that we filed against Turkey. So, we felt that we had a small victory there. But if 1 country gets blocked, there are many other countries that move in to take their place. So, it's a continuous thing, that's why we were so supportive of the President announcing the 232 action. Because the reality is, the world is long in steelmaking capacity, a lot of that excess capacity is in China. And while China cannot import into the U.S. because the duties are so high, they ship into other markets, and then those markets get disrupted and they look for the next best market. And very often the U.S. is the next best market. And unfortunately, it's a long and protracted process. It's a political process. There are sometimes factors that weigh into it that are not solely the data or the evidence that we believe…

Great. And I think you are doing a very good job on the cost side. But ultimately, at the end of the day, the entire market, it's -- the supply and demand dynamics are being crushed by these imports. And has anybody visited Washington and met with the administration to discuss this like, in particular? Like specifically the rebar merchant bar market?

Yes. I won't go into the specifics, but there has been any number of letters that have been presented to President with signatures of all of the steelmakers across the U.S. There have been any numbers that meetings with the administration and then the West Wing. So, they don't always make the press or the fake news, but anyway, there have been lots and lots of efforts and lots of meetings.

We have an additional question from Tyler Kenyon with KeyBanc Capital.

The construction markets within the United States, can you provide any color in terms of what you're seeing regionally? In meaning, which markets are perhaps stronger than others and may be what applications within construction are stronger or weaker than others?

Yes, I think generally, we see pretty good dynamics in our southern footprint. So, I think the west, we're seeing that coming back nicely. And with the prior trade case, obviously, Japan and Taiwan are out of that market, and with the differential between import offers and U.S. pricing. Imports are a bit at bay in the west region. Texas, North Texas, as I said, continues to be robust and strong and -- on a daily basis on our commute, we count the cranes, and that's a sign of good activity level. So, I think generally speaking, we're quite encouraged about construction activity going forward. And as I said earlier, if and when we get a comprehensive infrastructure plan to deal with the aging infrastructure that would be in addition to, what I think is a pretty good demand environment.

Okay. And I just have a high-level question on just the supply-demand dynamics. Right now, there has been a lot of capacity being added to the market and I think a lot of that's good in a way because it's new technology. But do you foresee any of the -- call it older rebar assets because some of the mini mills are several decades old. Would you see over the next three or five years that some of this add will ultimately be capacity replacement?

Well, if you look at CMC's capacity, we have -- if you look at our total footprint in the U.S., we have a really efficient portfolio of assets that we are continuously investing in. And as you're well aware, we have today, the only two micro mills, which is the latest, most cost-effective, highest-quality rebar production in the U.S. I think, if you looked in a little deeper, there has already been some mixed-use mills, mills that can produce a variety of products, not only rebar, but merchant and other products that have reprioritized to other products and maybe shifted their rebar production to a more efficient mill. So, I think you'd have to talk to other producers and what their plans are, and where their cost structure is relative to the low end of the cost curve. But we're pretty comfortable where we sit in that cost curve.

At this time, there appear to be no further questions. Ms. Smith, I'll now turn the call back over to you.

Thank you, Branden. Thank you for joining us on today's conference call. We look forward to speaking to -- with many of you during our investor visits in the coming days and weeks. And we'll talk to you again in January.

This concludes today's Commercial Metals Company Conference Call. You may now disconnect.