FORT WAYNE, Ind., Sept. 16, 2014 /PRNewswire/ -- Steel
Dynamics, Inc. (NASDAQ/GS: STLD) today announced the completion of
the acquisition of Severstal Columbus, LLC ("Columbus"), one of the newest and most
technologically advanced mini-mills in North America. As
previously announced, the purchase price for Columbus was $1.625
billion in cash, with customary transaction purchase price
adjustments, and has been funded with approximately $350 million of available cash, new senior
unsecured notes in the amount of $1.2
billion, and borrowings on the company's revolving credit
facility.
"I would like to enthusiastically welcome the Columbus employees, community, and customers
into the Steel Dynamics family," stated Mark D. Millett, Chief Executive Officer.
"The successful completion of the Columbus acquisition is an important milestone
for Steel Dynamics and represents a significant step in the
continuation of our growth strategy. The expected cash and
earnings per share accretion and increased scale make this
transaction a noteworthy strategic opportunity for our shareholders
and all of our employees."
The acquisition of Columbus
significantly expands and diversifies the company's steel operating
base, increasing Steel Dynamics' annual steel shipping capacity to
11.0 million tons, a 40 percent increase. For the twelve
months ended June 30, 2014, pro forma
revenue was $9.7 billion and pro
forma Adjusted EBITDA was $965
million (Note 1), with Columbus contributing $2.2 billion and $254
million, respectively. The additional exposure to the
high-growth oil country tubular goods and automotive markets
complements Steel Dynamics' product offerings. Additionally,
Columbus is advantageously located
in Mississippi to serve the
high-growth markets in the Southern U.S. and Mexico, providing both geographic
diversification and growth opportunities for Steel
Dynamics.
Note 1: Pro forma EBITDA is defined as the pro forma net income
attributable to Steel Dynamics, Inc. before pro forma interest
expense, net of interest income, pro forma income taxes, and pro
forma depreciation and amortization. Pro forma Adjusted
EBITDA is defined as pro forma EBITDA adjusted for certain non-cash
items such as pro forma equity based compensation, pro forma
unrealized hedging losses on commodities derivatives, pro forma
lower of cost or market inventory valuation, and pro forma asset
impairments. The company believes that pro forma EBITDA and
pro forma Adjusted EBITDA are useful indicators of performance and
ability to meet debt service and capital expenditure
requirements. They are not, however, intended as alternative
measures of operating results or cash flow from operations as
determined in accordance with generally accepted accounting
principles, and they may not necessarily be comparable to similarly
titled measure used by other companies.
The following table presents a reconciliation of pro forma
EBITDA and Adjusted EBITDA to pro forma net income attributable to
Steel Dynamics, Inc. (The amounts are unaudited, depicted in
dollars in thousands, and are pro forma the twelve months ended
June 30, 2014):
Net income
attributable to Steel Dynamics, Inc.
|
$ 276,434
|
Interest
expense
|
190,032
|
Interest
income
|
(2,966)
|
Income tax
expense
|
149,511
|
Depreciation and
amortization
|
326,755
|
EBITDA
|
939,766
|
Unrealized hedging
losses
|
3,510
|
Lower of cost or
market inventory valuation
|
3,068
|
Equity-based
compensation
|
19,024
|
Asset
impairment
|
30
|
Adjusted EBITDA
|
$ 965,398
|
About Steel Dynamics, Inc.
Steel Dynamics, Inc. is one of the largest domestic steel
producers and metals recyclers in the
United States based on estimated annual steelmaking and
metals recycling capability, with annual sales of $7.4 billion in 2013, over 7,400 employees, and
manufacturing facilities primarily located throughout the United States (including six steel mills,
six steel processing facilities, two iron production facilities,
over 90 metals recycling locations and six steel fabrication
plants).
Forward-Looking Statement
This press release contains some predictive statements about
future events, including statements related to conditions in the
steel and metallic scrap markets, Steel Dynamics' revenues, costs
of purchased materials, future profitability and earnings, and the
operation of new or existing facilities. These statements are
intended to be made as "forward-looking," subject to many risks and
uncertainties, within the safe harbor protections of the Private
Securities Litigation Reform Act of 1995. These statements speak
only as of this date and are based upon information and
assumptions, which we consider reasonable as of this date,
concerning our businesses and the environments in which they
operate. Such predictive statements are not guarantees of future
performance, and we undertake no duty to update or revise any such
statements. Some factors that could cause such forward-looking
statements to turn out differently than anticipated include: (1)
the effects of a recurrent slowing economy on industrial demand;
(2) changes in economic conditions, either generally or in any of
the steel or scrap-consuming sectors which affect demand for our
products, including the strength of the non-residential and
residential construction, automotive, appliance, and other
steel-consuming industries; (3) fluctuations in the cost of key raw
materials (including steel scrap, iron units, and energy costs) and
our ability to pass-on any cost increases; (4) the impact of
domestic and foreign import price competition; (5) risks and
uncertainties involving product and/or technology development; and
(6) occurrences of unexpected plant outages or equipment
failures.
More specifically, we refer you to SDI's more detailed
explanation of these and other factors and risks that may cause
such predictive statements to turn out differently, as set forth in
our most recent Annual Report on Form 10-K, in our quarterly
reports on Form 10-Q or in other reports which we from time to
time file with the Securities and Exchange Commission. These are
available publicly on the SEC Website, www.sec.gov, and on the
Steel Dynamics Website, www.steeldynamics.com.
SOURCE Steel Dynamics, Inc.