Hello and welcome everyone to the fiscal 2025 First Quarter Earnings Call for CMC. Joining me on today's call are Peter Matt, CMC's President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer.

Today's materials, including the press release and supplemental slides that accompany this call, can be found on CMC's Investor Relations website. Today's call is being recorded. After the company's remarks, we will have a question and answer session, and we will have a few instructions at that time.

I would like to remind all participants that today's discussion contains forward-looking statements, including with respect to economic conditions, effects of legislation, US steel import levels, construction activity, demand for finished steel products, the expected capabilities, benefits, and timeline for construction of new facilities, the company's operations, the company's strategic growth plan, legal proceedings, the company's future results of operations, financial measures, and capital spending.

These statements reflect the company's beliefs based on current conditions but are subject to risks and uncertainties.

The company's earnings release, most recent annual report on Form 10-K, and other filings with the Securities and Exchange Commission contain additional information concerning factors that could cause actual results to differ materially from those projected in forward-looking statements.

Except as required by law, CMC does not assume any obligation to update, amend, or clarify these statements. Some numbers presented will be non-GAAP financial measures, and reconciliations for such numbers can be found in the company's earnings release, supplemental slide presentation, 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 Peter..

First, to achieve sustainably higher, less volatile through-the-cycle margins that are fortified by our operational and commercial excellence initiatives.

Second, to execute on attractive organic growth opportunities, and third, in a disciplined manner, to pursue inorganic growth opportunities that broaden CMC's commercial portfolio of early-stage construction products, improve our customer value proposition, and meaningfully extend our growth runway.

Last quarter, we introduced Transform, Advance, and Grow, or TAG, as we call it, our enterprise-wide operational and commercial excellence initiative, with the goal of generating a permanent improvement in our margin profile.

This program is unlike any ever launched at CMC due to the breadth and depth of its reach, as well as the visibility and the accountability structures built to support it. Every line of business and every support function has been involved in identifying and quantifying opportunities that now include over 150 different initiatives.

Currently, we are executing on the first wave of these initiatives and are seeing very strong early results. One such initiative is a program to reduce alloy consumption and waste. The effort is being led by process experts in coordination with mill shop operators from across our mill footprint.

The team is working to minimize alloy comps while continuing to meet product quality specifications. We expect the efforts to date will produce a sustainable benefit of approximately $5 million annually.

In another initiative, we are working to improve our melt shop yields through enhanced technical knowledge sharing, increased scrutiny around measurements and waste, and more disciplined processes. We expect this effort to produce sustained benefits of between $5 million and $10 million annually.

These programs are just two of the larger initiatives that are being executed in the first wave and should provide a useful template for understanding the nature of these initiatives, how they are being delivered, and the overall scope and scale of CMC's broader TAG program.

We have several other major operational and commercial work streams now underway that are intended to drive and sustain higher margins through a variety of pathways, including optimized logistics, lower insurance premiums, commercial excellence, and many more.

Progress to date gives us confidence that our TAG-related efforts should provide financial benefit in fiscal 2025, with more to come in the years ahead. We are making solid progress on CMC's key organic growth projects, particularly at our new Arizona 2 facility.

As a reminder, this plant is the first micromill in the world capable of producing both rebar and merchant bar products, and we are navigating the unique challenges that invariably come with any breakthrough technology.

Good advancement is evidenced by the fact that our team was able to achieve two consecutive monthly production records at the end of the first quarter. Output levels should continue to increase as we move through fiscal 2025, and we expect to exit the year at a run rate near nameplate capacity of 500,000 tons annually.

Meanwhile, progress at CMC's Steel West Virginia site remains on track, and we are currently on target for the commissioning process to begin in late calendar 2025.

On the inorganic front, we remain interested in entering attractive adjacencies for our business where we believe we have a clear right to play and an opportunity to offer immediate value given CMC's current customer knowledge, market positioning, and operational capabilities.

We are targeting segments of the $150 billion early-stage construction segment that touch the types of projects we are already servicing and feature higher, more stable margins.

These adjacent markets should also benefit from megatrends that are expected to drive construction activity for years to come, which include infrastructure investment, reshoring, the general scarcity of labor, and environmental changes driving increased extreme weather conditions.

Before I turn things over to Paul, I would like to make a brief comment on the litigation between CMC and Pacific Steel Group. In its complaint filed in the California courts in 2020, Pacific Steel Group claimed, among other things, various restraints on trade by CMC.

A trial on Pacific Steel Group's claims concluded with a jury verdict and judgment in favor of Pacific Steel Group in an amount of $110 million, which was subsequently trebled as a matter of law. CMC is very confident in how we conduct our business practices, and we were very surprised and deeply disappointed by the outcome of this trial.

We are vigorously pursuing all appropriate avenues to appeal the decision. Because this litigation is ongoing, we are very limited in what we can discuss about the case or the potential outcome of the appeal process.

Paul?.

Thank you, Peter. Good morning to everyone on the call. As noted earlier, we reported a fiscal first quarter 2025 net loss of $175.7 million or a loss of $1.54 per diluted share, compared to net earnings of $176.3 million and net earnings per diluted share of $1.49 in the prior year period.

Excluding an approximate $265 million after-tax charge related to the litigation accrual, adjusted earnings for the quarter totaled $88.5 million or $0.78 per diluted share, compared to $176.3 million and $1.49 per diluted share, respectively, in the prior year period.

Consolidated core EBITDA was $210.7 million for the first quarter of 2025, representing a decline from $313.7 million generated during the prior year period. Slide 12 of the supplemental presentation illustrates the year-to-year changes in CMC's quarterly performance.

Profitability at our North American Steel Group was negatively impacted by lower margins over scrap. Results for CMC's Emerging Business Group were hindered by lower contribution by our Tensor and Impact Metals divisions. Consolidated core EBITDA margin of 11% remained above historical levels and compared to 15.7% in the prior year period.

CMC's North American Steel Group generated adjusted EBITDA of $188.2 million for the quarter, equal to $164 per ton of finished steel shipped. Segment adjusted EBITDA decreased 29% compared to the prior year period, driven primarily by lower margin over scrap cost on steel and downstream products.

Controllable cost per ton of finished steel shipped improved on both a sequential and year-over-year basis, helped by lower freight costs, better cost performance at our Arizona 2 Micromill, and improved fixed cost leverage across CMC's mill footprint.

Adjusted EBITDA margin for the North American Steel Group of 12.4% compares to 13.5% in the fourth quarter of 2024. As Peter indicated earlier, demand for long steel products was strong during the quarter.

Finished steel shipments increased by 4.4% compared to a year ago and were up 2.3% on a sequential basis, which compares to a normal fourth quarter to first quarter seasonal reduction of between 4% and 7%.

Turning to Slide 14 of the supplemental deck, our Europe Steel Group reported adjusted EBITDA of $25.8 million for the first quarter of 2025, compared to $38.9 million in the prior year period. The reduction was driven by lower receipts from energy costs rebate programs.

During this year's first quarter, total receipts amounted to $44.1 million and came solely from an annual CO2 credit, compared to receipts in the prior year period of $66.3 million from two different programs, $27.7 million from the annual CO2 credit, and $38.6 million related to a temporary solution.

Excluding the impact of energy rebates, Europe Steel Group's financial performance improved by $9.2 million from the prior year period, as strong cost management efforts more than offset a 9% decline in shipment and stagnant metal margins.

Results for the quarter include approximately $4.7 million in costs related to planned maintenance overhauls and a $1.2 million expense associated with early retirement and layoff costs. Employee-related costs are expected to drive further improvements in controllable costs at the facility as we move forward.

Margin levels have been range-bound between a couple of years, six quarters despite an improving Polish economic environment, and positive developments within the Polish construction sector.

We would expect margins to remain under pressure until the level of rebar imports begins to recede, a scenario that would likely require an economic recovery in Germany or new sources of demand such as the rebuild in Ukraine.

Emerging Business Group first quarter net sales of $169.4 million decreased by 4.4% on a year-over-year basis, while adjusted EBITDA of $22.7 million declined by 26.6%. The decline was driven by lower margin product mix and project delays within our Tensor division, as well as reduced truck and trailer sales at CMC's Impact Metals division.

We believe that the reduced profits in the Tensor division incurred during the quarter should be largely recaptured later in fiscal 2025, primarily in the third and fourth quarters. Internally, our annual outlook for the Emerging Business Group is unchanged in the wake of the first quarter's disappointing results.

Strong project-related shipments of Performance Reinforcing Steel and healthy activity levels in our Construction Services business helped to offset some of the softness elsewhere in the EBG group.

The weaker sales mix during the first quarter led to a 400 basis point decline in the adjusted EBITDA margin compared to the first quarter of 2024, but we expect recovery for the remainder of the year. As of November 30, cash and cash equivalents totaled $856.1 million.

In addition, we had approximately $815 million of availability under our credit and accounts receivable facilities, bringing total liquidity to just under $1.7 billion. During the quarter, we generated $213 million of cash from operating activities, which included a $26.2 million release of cash from working capital.

Capital expenditures of $118.2 million were largely driven by construction activity related to a West Virginia micro mill project. CMC's leverage metrics remain attractive and have improved significantly over the last several fiscal years.

As can be seen on Slide 19, for the first fiscal quarter of 2025, our net debt to adjusted EBITDA ratio now sits at just 0.6 times, while net debt to capitalization is only 6%.

We believe our robust balance sheet and overall financial strength provide us the flexibility to finance our strategic organic growth projects and pursue opportunistic M&A while continuing to return cash to shareholders. As we look towards fiscal 2025 capital spend outlook, we expect to invest between $630 million and $650 million.

Outside of normal sustaining investments of approximately $250 million in CapEx, our 2025 includes substantial dollars related to the West Virginia project. As a reminder, approximately $200 million of spending related to this project was deferred from fiscal 2024 into 2025.

As outlined on past earnings calls, CMC targets a prudent and balanced approach to capital allocation. Our first priority is value-accretive growth that furthers our strategy and strengthens our business.

Coming in a close second is providing our shareholders with an attractive level of cash distribution in the form of both dividends and share repurchases. To this end, CMC returned approximately $71 million to our shareholders during the first quarter as we repurchased approximately 919,000 shares at an average price of $54.83 per share.

As of November 30, we had $353.4 million available for repurchase under our current authorization. I'll now turn the call back over to Peter for additional comments on CMC's financial outlook..

Thank you, Paul. We expect consolidated financial results in our second quarter of fiscal 2025 to decline from the first quarter level.

Finished steel shipments within the North American Steel Group are anticipated to follow normal seasonal trends, while the adjusted EBITDA margin is expected to decrease on lower margins over scrap costs on steel and downstream products.

Adjusted EBITDA for our Europe Steel Group should be in line with the prior year second quarter as stringent cost management efforts continue to offset a weak market environment. Financial results for our Emerging Businesses Group are anticipated to decline due to normal seasonality and be in line with prior year results.

We are very encouraged by our conversations with customers and the optimism they have voiced about the coming quarters. Key indicators of the construction pipeline also point in a positive direction. Outside of construction, measures of business confidence, both large and small, have improved significantly over the last two months.

The palpable shift in sentiment gives us confidence that the current softness is transient and that we should soon enter a period of renewed strength in our core markets. We have the potential to reach new heights in the future as we execute on our key strategic priorities and deliver significant value for our shareholders.

As we move past near-term uncertainty, CMC is well-positioned to benefit from powerful structural trends in North America that should drive construction activity for years to come.

I would also like to thank our customers for their trust and their confidence in CMC and all of our employees for delivering yet another quarter of very solid safety and operational performance..

Thank you. And at this time, we will now open the call up to questions. If at any time your question has been addressed, please press star then two. In the interest of time, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster.

The first question today comes from Sathish Kasinathan with Bank of America. Please go ahead..

Yeah. Hi. Good morning. Thanks for taking my questions. My first question is on the North American steel product shipments. You mentioned that you saw some late-season construction activity in Q1, which continued into the first two weeks of December.

And with the Arizona 2 mill ramping up, how should we look at the state production shipments for Q2 compared to last year?.

Yeah. I think what you should expect is to see a normal seasonal trend between Q1 and Q2 going into our second quarter for 2025. So that's generally about five to ten percent..

That's right, Sathish..

Okay..

Verging on the higher end given that we're starting from a higher place..

Okay. Understood. Thank you. My next question is on the Emerging Business Group. So you talked about several large project delays for Tensor.

Can you provide more color on what's driving these delays? Is it limited to Europe, or are you seeing more broad-based delays across all regions?.

No. I think, well, first of all, thanks for the question. I think in this instance, the delays are really pretty broad-based. Both in North America and in the rest of the world, we're seeing kind of some project delays.

I think, you know, it turned out in North America, some of these projects, they're lumpy projects, and the delay of these projects has really kind of impacted the earnings in the quarter. But as we said in the prepared remarks, we fully expect that these projects are going to move forward.

We've got kind of a number of data points around them that give us confidence in that fact. And so it's a matter of the earnings, the revenue, and the earnings coming in just later in the year..

And given that these projects are mostly lumpy, should we assume that the recovery will be more meaningful and on an annual basis, probably the impact is not that significant?.

Yeah. I think, again, we expect Tensor to grow nicely this year. So we're really shifting what might have been some revenue and EBITDA in Q1 into Q3 or Q4. When you look at it on an annual basis, we should see some nice growth in Tensor this year..

Given that Tensor really soil stabilization occurs at the outset of the projects, you know, projects that get pushed from the fall generally are not going to start up until the springtime. That's why Peter outlined, you know, really it'll be Q3 and Q4, not necessarily a pull-up in Q2..

Okay. Thanks, Peter. Thanks, Paul..

Thank you, Sathish..

The next question comes from Katja Jancic with BMO Capital Markets. Please go ahead..

Hi, and Happy New Year, everyone. Maybe first on Peter, you mentioned two initiatives under TAG that should generate, I think, combined $10-$15 million in annualized benefits.

Is this going to be generated in fiscal year 2025, or how should we think about this?.

So those numbers are kind of run rate estimates for what we think we can get to. What I will tell you, Katja, is we expect or we expect we had TAG benefit in Q1, and we clearly expect TAG benefits in fiscal 2025. What we have not done is we've not quantified precisely what 2025 will be in totality from TAG, and that's purposeful.

We are, you know, we kind of built this program. We're in the middle of a number of phase one initiatives, and we're wanting to kind of pressure test what we're doing here before we outline in great detail the program for you. But the intent of this was to give you some perspective on the potential magnitude of initiatives.

We said these are some larger initiatives, but remember we have a backlog of 150 different initiatives. Right? So hopefully that gives you some perspective that this can be a meaningful contributor and not a meaningful contributor in isolation.

What we're trying to do is we're trying to elevate the margin over time of our business so that we will, through the cycle, generate higher margins. And I think this TAG program is a critical piece of that exercise..

Can you let us know of those 150 initiatives, how many of those are considered larger?.

You know, the $5 to $10 million type of initiatives? No, we're not going to do that at this point. It's a clever question, but we're going to stop short of that. Look, what we've said is, and based on my comments, hopefully, you can gather this is a meaningful effort.

And if it's going to elevate our margins meaningfully over the duration of this project, there need to be some serious initiatives here, and we're confident, but we need to spend the time and understand this and execute on these before we share too much of that detail with all of you..

And then maybe on the capital allocation, when I look at the past few quarters, you've been spending about $50 million per quarter on share buybacks.

Is this level sustainable over the next few quarters given that CapEx is increasing?.

We think so. We think so. We've been very purposeful in kind of coming up with a balanced capital allocation strategy. And what we aim to do is to be consistent. And we set this program up when we set the share repurchase program up, we said we would execute it over kind of roughly three years. And that's our intent to do.

So we intend to be in the market on a regular basis buying our shares, and barring any kind of unusual circumstance, that's what we'll do..

Perfect. Thank you very much..

Thank you..

The next question comes from Phil Gibbs with KeyBanc Capital Markets. Please go ahead..

Hey, good morning. Question is just kind of about the second half of the fiscal year in terms of expectations for recovery and just construction overall.

And what's driving that in terms of specific areas? Where it would be, and does energy or semis, just trying to understand some of the conversations that you're having, what you're seeing in your order book, that sort of thing in terms of the viewpoint..

Yep. Great question, Phil. Thank you. So we are optimistic for the back half of our fiscal year, as you note. And I think we are kind of queuing off of some of the general optimism that we're seeing all around us. You'll note that we introduced a number of additional indices to kind of project the confidence that we feel.

And so we're seeing that in general around us. And then in our order books, we are seeing a high level of bidding activity. We're seeing backlogs maintained, and if we tick through some of our end markets, infrastructure is here. Right? The spending is on the ground.

I can give you the anecdotal conversation I had with a southern state DOT representative who told me that based on the backlog of activity that they have, they're going to be busy for years to come. So this is kind of the multiyear trend that we've been talking about.

If you move to nonresidential, you know, we have been seeing an elevated level of spending in manufacturing, and that seems to have some renewed momentum. There's a number of projects in the Gulf, LNG projects that are now moving forward. Some of the chip projects, particularly in the west, appear to be moving forward again.

So you're getting some more of this kind of reshoring energy transition activity that these are big consumers of rebar. And if we look at the Dodge Momentum Index from an outsider's perspective, what we see is that it's been at an elevated level for the past year.

And that indicates that we should be coming into the period when some of these design phase projects start to become, you know, kind of real. So in conversations with our contract customers, they suggest that they're also very busy.

So while, you know, there are some sectors of the non-residential space that we think will remain a little bit lackluster, we think in general, the demand is setting us up for, again, in this case, kind of multiyear strong demand.

And lastly, even in residential, I know there's been a lot of conversation about interest rates, but interest rates are moving down, and we do have this deficit of two to four million homes in North America that needs to get addressed at some point.

So again, these are data points, but they suggest to us that the tipping point is near, and we're very optimistic about that..

Thanks. And then secondly, just on the market conditions as we comment to the New Year.

Any visibility on where you think scrap may settle out over January here?.

Well, it's interesting. I will say scrap has been a bit of an enigma for us. We've been thinking that it was hitting bottom for a while. We were surprised to see scrap down in December. The latest indications that I've heard are, you know, flat to up twenty for January, but that remains to be seen.

I think as we've gotten closer to these data points, it seems like they grow negative over time. So but flat to up twenty is what we've heard. We do still believe that we are very close to the bottom on scrap, and obviously, it's a catalyst for us in terms of inflecting rebar pricing and merchant pricing..

Thank you..

Thank you, Phil..

The next question comes from Mavis Liu with BNP. Please go ahead..

Hi. Good morning. My first question is on the rebar demand outlook. We've seen a presentation, you commented on the highway project and also the housing shortages and their impacts on the rebar demand.

Just on the timeline, when do you expect those to start having an impact?.

Yeah. Thank you very much for the question. So on highway demand, it's here. It's happening now. We are very busy on the infrastructure side. And again, given the structure of the program, we expect that to grow over time, and that is going to be, you know, kind of the for the next three to five years, we're going to have strong demand on that front.

On the residential front, so in 2024, demand was mixed. Single-family wasn't so bad. Multifamily was weaker. If we look at most of the forecasts, including Dodge, what they seem to indicate is that residential will shift back into the positive in 2025. And kind of a small positive uptick in 2025 and a much stronger uptick in 2026.

So exactly when that occurs, it's not entirely clear, but we're optimistic that the demand there is going to be inclined to pull things forward..

Yeah. Thank you. That's very clear. Just a bit follow-up on that. So we are expecting for some new rebar supply capacity to come online later this fiscal year.

What's your view on those additional supply and, also, do you think the additional demand on rebar can offset those additional supplies?.

Yeah. We look very carefully at this, as you can imagine. We believe that the kind of the real new supply in the market by kind of new competitors, so to speak, is not such a big number. There is obviously, Highbar is going to be starting up. That's one increment, and that's going to happen in the second half of 2025.

There's an increment that's been put in the market by a group called Optimist that's already in the market today. So that's not new capacity as we sit here today. And then the rest of it is, you know, kind of Nucor and ourselves putting in capacity. And in most instances, we believe that is replacing existing capacity.

So we are sanguine about the ability to absorb the incremental capacity given the demand profile that we see. And if you think about what we've said in the prepared materials, you can see that from the market that we have today, we expect there to be over one million tons of incremental demand over the next several years..

The next question comes from Alex Hacking with Citi. Please go ahead..

Yeah. Good morning, and thanks for the call. I just had one question. I guess it's following up on your last comment there, Peter. Your commercial metals are sold around four and a half million tons or so in North America for the last five, six years. You know, you're adding a million tons of capacity between Arizona and West Virginia.

Now, how should we think about the mix of that between growth in capacity and replacement capacity? And if rebar demand grows strongly, you know, can CMC ultimately sell five and a half million tons, or is there a chunk of it that's just going to be a replacement? Thank you very much..

Yep. Thank you very much. So Arizona, let's just start with Arizona first. Arizona, if you go back a few years, you know, we had a plant in California, which we kind of idled and then ultimately sold the property on. Right? So Arizona 2 is really the rebuild of that capacity. So we don't view that as kind of incremental capacity from CMC.

We're kind of replacing obsolete capacity that we had. And if you look at the kind of split of what we're expecting to do in Arizona 2, 350,000 tons are expected to go to rebar, and 150,000 tons are expected to go to merchant. So it's exactly offsetting the California capacity.

If we go to West Virginia, the Northeast is an area where we are kind of underrepresented from a share perspective. And so our perspective on that market is there is room given the demand and the likely demand growth for us to expand capacity a bit with our existing footprint. So there is some expansion in the case of the West Virginia business.

But again, we think it's manageable when we look at our share around the rest of the country relative to that region..

Thanks. I guess just following up, Rancho Cucamonga has been closed for a while now. Right? So there's still an incremental million.

I guess, are you planning on idling other capacity, I guess, is more of my question so that, or if, you know, we get strong rebar demand as we expect over the next several years, you know, you would be able to grow into both Arizona and West Virginia..

Yeah. What I'd say is we are expecting, as hopefully you gather from my prior comments, Alex, that we are expecting rebar demand to grow. And so we are the natural kind of party to fulfill that need. And so yes, it's really built on the expectation that we have a growing market.

To the extent that we do not have a growing market or the market doesn't grow as quickly as we think, we have a system here. And what we like about our system is that we can flex our system up and down to meet the demands in the market. And one thing that I want to be really clear about is that our focus is on value over volume.

So we are going to flex our system to meet the demand in the market. And I think that will result in a good outcome for us..

Thank you very much..

The next question comes from Matt Duchan with Wolfe Research. Go ahead..

So just curious on Europe, let's say demand is structurally damaged longer term, and, you know, just for some reason, German demand doesn't fully bounce back.

You know, if that is the case, what levers do y'all have to pull just beyond the TAG initiatives? Or anything else y'all have in mind?.

Well, again, we've done a lot of work so far. There's always more to do. We have, as Paul noted in his remarks, we've been rightsizing the operation from a manning perspective.

In the event that we were, you know, kind of structurally for some reason, structurally damaged over there or could not see a recovery, we could do some more reductions on that front. And I think we'd have to, you know, kind of turn over more stones and get to just a more bare-bones structure until we see a recovery.

Now, just to the positive side of this is that we don't think the scenario you're positing is the scenario. We believe the scenario is Germany is going to recover, Europe is going to recover, there is going to be an end to the war in Ukraine, and that's going to create some demand here.

And given the cost position that we built in Poland, which we are very confident is as low cost, when those conditions occur, we are going to see profitability inflect nicely up well before what you might expect.

And the other thing that I would say is that when you look at Poland, and we always talk about breakeven, we want to get the business to breakeven. And when we're talking about breakeven, we're talking about breakeven excluding all of these energy credits and so forth that we've been getting.

If we factor those energy credits in, we're actually generating a profit there, and we are cash flow positive there. So our perspective is this business is a business that has contributed a tremendous amount to your point on TAG.

The Polish team is, they're great steelmakers, and they've given us a lot of really powerful ideas that can help our network across North America. So it's a business that we're really proud of what they've done, and we think there's a bright future for them..

That's all super helpful color. I'll leave it there..

Thanks, Matt..

At this time, there appear to be no further questions. Mr. Matt, I'll now turn the call back over to you for closing remarks..

Thank you. At CMC, we remain confident that our best days are ahead. The combination of the structural demand trends we have noted, operational and commercial excellence initiatives to strengthen our through-the-cycle performance, and value-accretive growth opportunities create an exciting future for our company.

We are committed to a balanced capital allocation strategy that includes investments in our company's future and a return of capital to our shareholders. Thank you for joining us on today's conference call. We look forward to speaking with many of you during our investor calls in the coming days and weeks. Thank you very much..

This concludes today's CMC conference call. You may now disconnect..