FORT WAYNE, Ind., Dec. 16, 2015 /PRNewswire/ -- Steel
Dynamics, Inc. (NASDAQ/GS: STLD) today, the company provided fourth
quarter 2015 earnings guidance in the range of $0.03 to $0.07 per diluted share, compared
to sequential third quarter 2015 earnings of $0.25 per diluted share and prior year fourth
quarter adjusted earnings of $0.40
per diluted share, which excluded non-cash fixed asset impairment
charges related to the company's Minnesota Operations and certain
post-acquisition costs related to the company's Columbus steel mill
acquisition.
Despite lower earnings, the company expects to still generate
cash flow from operations in excess of $200
million during the fourth quarter 2015, which would result
in record high liquidity at the end of 2015.
The company is currently in the process of conducting its
required annual assessment of goodwill and indefinite-lived
intangible asset valuation and based on step one of the two-stepped
process, believes that the carrying values associated with its
metals recycling operations are impaired. However, step two of the
analysis is still underway and a reasonable range of impairment has
not yet been determined. Accordingly, no potential asset
impairment has been included in the provided fourth quarter 2015
guidance.
Profitability from the company's steel operations for the fourth
quarter 2015 is expected to be significantly lower in comparison to
the sequential third quarter 2015 results, based on lower steel
shipments caused by continued high level of steel imports, customer
destocking and seasonally lower demand. While lower shipments
are expected across the steel platform, the most significant
decline is anticipated in the company's commodity-grade hot roll
products. Fourth quarter 2015 overall average steel product pricing
is expected to decrease meaningfully, offsetting the savings
derived from lower ferrous scrap costs. The heavy equipment,
agricultural and energy markets remain challenged, while the
automotive market remains strong and the construction market
continues to improve.
Sustained strong demand for the company's fabricated steel joist
and decking products in what is typically a seasonally lower demand
timeframe indicates the non-residential construction market is
continuing a positive trend. Fourth quarter 2015 fabrication
shipments are expected to increase from sequential third quarter
levels. However, average pricing is expected to be lower
based on both market conditions and a shift in product mix related
to the September 2015 acquisition of
additional decking assets. Steel raw material costs are not
expected to decline to the same degree as product pricing;
therefore, despite improved volume, fourth quarter 2015
profitability from the company's fabrication operations is expected
to be lower than the record results achieved in the sequential
third quarter.
Metals recycling financial results are expected to decline to a
loss position for the fourth quarter 2015, based on lower shipments
and metal spread compression. Lower domestic steel mill
utilization is expected to result in significantly weaker ferrous
scrap shipments and has decreased ferrous scrap selling values
approximately $65 to $70 per ton from
the end of September 2015 to the end
of November 2015.
Dividends
The company's board of directors has
declared a quarterly cash dividend of $0.1375 per common share. The dividend is
payable to shareholders of record at the close of business on
December 31, 2015, and is payable on
or about January 11, 2016.
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 $8.8 billion in 2014,
approximately 7,500 employees, and manufacturing facilities
primarily located throughout the United
States (including six steel mills, eight steel coating
facilities, an iron production facility, approximately 80 metals
recycling locations and eight 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 uncertain economic
conditions; (2) cyclical and changing industrial demand; (3)
changes in conditions in any of the steel or scrap-consuming
sectors of the economy which affect demand for our products,
including the strength of the nonresidential and residential
construction, automotive, appliance, pipe and tube, and other
steel-consuming industries; (4) 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; (5) the impact of
domestic and foreign import price competition; (6) unanticipated
difficulties in integrating or starting up new or acquired
businesses; (7) risks and uncertainties involving product and/or
technology development; and (8) 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.
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SOURCE Steel Dynamics, Inc.