CHARLOTTE, N.C., Jan. 31,
2017 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced
today consolidated net earnings of $159.6
million, or $0.50 per diluted
share, for the fourth quarter of 2016 and $796.2 million, or $2.48 per diluted share, for fiscal 2016. In the
fourth quarter of 2016, the Company changed its method of
accounting for certain inventories from the last-in, first-out
(LIFO) method to the first-in, first-out (FIFO) method which
required retrospective application to prior period financial
statements.
Comparative consolidated net earnings after the
retrospective application of the change in accounting principle
were $305.4 million, or $0.95 per diluted share, for the third quarter of
2016 and a net loss of $187.5 million
or $0.59 per diluted share for the
fourth quarter of 2015. Comparative consolidated net earnings after
the retrospective application of the change in accounting principle
were $80.7 million, or $0.25 per diluted share, for fiscal 2015.
Earnings (loss) before income taxes and noncontrolling interests
presented after the retrospective application of the change in
accounting principle by segment were as follows for the fourth
quarter and full year 2016 and 2015 (in thousands):
|
|
Three Months (13
Weeks) Ended
|
|
Twelve Months (52
Weeks) Ended
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
Steel
mills
|
|
$
321,270
|
|
$
(43,519)
|
|
$
1,724,168
|
|
$
629,256
|
Steel
products
|
52,079
|
|
76,787
|
|
249,970
|
|
276,048
|
Raw
materials
|
(18,881)
|
|
(161,160)
|
|
(95,121)
|
|
(283,938)
|
Corporate/eliminations
|
(99,428)
|
|
(67,151)
|
|
(580,358)
|
|
(379,500)
|
|
|
$
255,040
|
|
$
(195,043)
|
|
$
1,298,659
|
|
$
241,866
|
|
|
|
|
|
|
|
|
|
Included in the fourth quarter of 2016 results were the effects
of a change in estimate related to the cost of certain inventories
that resulted in a benefit of $77.6
million, or $0.16 per diluted
share. Compensation costs in the fourth quarter of 2016 were
$42.0 million ($0.09 per diluted share) higher than anticipated
as a result of the effects of the change in accounting principle,
the effects of the change in estimate, and slightly better than
forecasted operating performance in December. Included in the third
quarter of 2016 results were charges related to legal settlements
of $33.7 million ($0.06 per diluted share) and a net benefit of
$11.1 million ($0.02 per diluted share) related to fair value
adjustments to assets in the corporate/eliminations segment.
Included in the fourth quarter of 2015 results were impairment
charges of $153.0 million
($0.47 per diluted share) related to
our Duferdofin Nucor S.r.l. joint venture and an $84.1 million ($0.17 per diluted share) impairment charge on
assets related to a blast furnace project that will not be utilized
in the future.
Nucor's consolidated net sales decreased 8% to $3.96 billion in the fourth quarter of 2016
compared with $4.29 billion in the
third quarter of 2016 and increased 14% compared with $3.46 billion in the fourth quarter of 2015.
Average sales price per ton decreased 7% from the third quarter of
2016 and was consistent with the fourth quarter of 2015. Total tons
shipped to outside customers were 5,815,000 tons in the fourth
quarter of 2016, a 1% decrease from the third quarter of 2016 and
an increase of 14% from the fourth quarter of 2015. Total fourth
quarter steel mill shipments decreased 1% from the third quarter of
2016 and increased 16% from the fourth quarter of 2015. Fourth
quarter downstream steel products shipments to outside customers
decreased 11% from the third quarter of 2016 and remained
consistent with the fourth quarter of 2015.
For fiscal 2016, Nucor's consolidated net sales decreased 1% to
$16.21 billion, compared with
$16.44 billion for fiscal 2015. Total
tons shipped to outside customers in fiscal 2016 were 24,309,000,
an increase of 7% from fiscal 2015, while average sales price per
ton decreased 8%.
The average scrap and scrap substitute cost per ton used in the
fourth quarter of 2016 was $236, a
decrease of 6% from $252 in the third
quarter of 2016 and an 8% increase from $219 in the fourth quarter of 2015. The average
scrap and scrap substitute cost per ton used for the full year 2016
was $228, a 16% decrease from
$270 in for the full year 2015.
Overall operating rates at our steel mills decreased to 74% in
the fourth quarter of 2016 as compared to 76% in the third quarter
of 2016 and increased compared to 68% in the fourth quarter of
2015. Steel mill operating rates for the full year 2016 increased
to 80% as compared to 73% for the full year 2015. The utilization
rates for the current and prior periods were revised during the
fourth quarter of 2016 as a result of an updated analysis of our
steel mill capacity.
Total steel mill energy costs in the fourth quarter of 2016
decreased approximately $1 per ton
compared to the third quarter of 2016 and were comparable to the
fourth quarter of 2015. Energy costs for the full year 2016
decreased $4 per ton from the full
year 2015 due to improved productivity from increased production
volumes and lower unit costs for electricity and natural gas.
Our liquidity position remains strong with $2.20 billion in cash and cash equivalents and
short-term investments and an untapped $1.5
billion revolving credit facility that does not expire until
April 2021.
In November, Nucor's board of directors declared a cash dividend
of $0.3775 per share payable on
February 10, 2017 to stockholders of
record on December 30, 2016. This
dividend is Nucor's 175th consecutive quarterly cash
dividend, and it marks 44 consecutive
years of an increased base dividend.
Nucor announced in December that it agreed to acquire Southland
Tube, an independent manufacturer of hollow structural section
(HSS) steel tubing, for $130 million,
or approximately 8x average EBITDA over the 2011-2016 period.
Southland Tube has one facility located in Birmingham, Alabama. With annual shipments of
about 240,000 tons, Southland Tube has the third largest market
share in HSS steel tubing. This acquisition is another step for
Nucor to build a market leadership position in the HSS steel tubing
market. The transaction closed on January 9,
2017.
Also in December, Nucor announced that it agreed to acquire
Republic Conduit, a leading manufacturer of steel electrical
conduit in North America, from
Luxembourg-based Tenaris S.A. for
approximately $335 million, or
approximately 6x the average of its 2015 and projected 2016 EBITDA.
Republic Conduit has two facilities located in Louisville, Kentucky, and Cedar Springs, Georgia. The transaction closed
on January 20, 2017, and as a result,
Nucor is a market leader in steel conduit.
The results of recent trade cases are having a positive impact
as steel imports were down approximately 15% in 2016 compared to
2015. In mid-2016, affirmative final determinations were announced
in three flat-rolled antidumping duty and countervailing duty cases
involving corrosion-resistant, cold-rolled and hot-rolled steel
products. These final determinations are an important step in
returning fair trade to the U.S. flat-rolled steel market. In
addition, the cut-to-length plate cases filed against twelve
countries continue to progress through the trade case process.
Affirmative final determinations have been announced on dumped
steel from Brazil, South Africa, and Turkey, and earlier this month, the U.S.
Department of Commerce announced its final determinations against
China for illegally subsidizing
and dumping plate. We expect all plate cases to conclude in the
coming months. The Department of Commerce also announced the
initiation of antidumping duty investigations of imports of steel
concrete reinforcing bar from Japan, Taiwan, and Turkey, and a countervailing duty
investigation of rebar imports from Turkey. We expect the rebar case to conclude
in 2017.
Operating performance at the steel mills segment in the fourth
quarter of 2016 decreased from the third quarter of 2016 due to
lower margins in the steel mills segment, with the most significant
impact at our sheet mills. The performance of the raw materials
segment in the fourth quarter of 2016 declined compared to the
third quarter of 2016 as it returned to a loss position due to
lower pricing at our DRI facilities in the fourth quarter. We
experienced decreased profitability for our steel products segment
in the fourth quarter of 2016 as compared to the third quarter of
2016 due to end of year seasonality.
Earnings in the first quarter of 2017 are expected to increase
compared to the fourth quarter of 2016. We believe full year 2017
profitability could significantly exceed the level achieved
for 2016. Prices began to increase during the fourth quarter for
our steel mills segment and we expect that trend to continue into
the first quarter of 2017. We expect improved volume in the first
quarter of 2017 as compared to the fourth quarter of 2016 for the
steel mills segment, particularly at our sheet and plate mills.
Scrap and other commodities prices increased through the end of
2016 and service center inventories remain low. Higher input costs
and declining imports are now causing the market to find an
improved and more sustainable level that we expect to benefit 2017.
Due to purchase accounting charges that will be taken in the first
quarter of 2017, we will not begin to experience the full financial
benefit of our recent investments in tubular products until the
second quarter of 2017. We expect decreased profitability for our
steel products segment in the first quarter of 2017 as compared to
the fourth quarter of 2016 due to typical seasonality. The raw
materials segment is expected to return to profitability in the
first quarter of 2017 as scrap prices increase and pricing improves
at our DRI facilities as pig iron prices increase.
Nucor and its affiliates are manufacturers of steel products,
with operating facilities primarily in the U.S. and Canada.
Products produced include: carbon and alloy steel -- in bars,
beams, sheet and plate; hollow structural section tubing;
electrical conduit; steel piling; steel joists and joist girders;
steel deck; fabricated concrete reinforcing steel; cold finished
steel; steel fasteners; metal building systems; steel grating; and
wire and wire mesh. Nucor, through The David J. Joseph
Company, also brokers ferrous and nonferrous metals, pig iron and
HBI/DRI; supplies ferro-alloys; and processes ferrous and
nonferrous scrap. Nucor is North
America's largest recycler.
Certain statements contained in this news release are
"forward-looking statements" that involve risks and
uncertainties. The words "believe," "expect," "project,"
"will," "should," "could" and similar expressions are intended to
identify those forward-looking statements. Factors that might
cause the Company's actual results to differ materially from those
anticipated in forward-looking statements include, but are not
limited to: (1) competitive pressure on sales and pricing,
including competition from imports and substitute materials; (2)
the sensitivity of the results of our operations to prevailing
steel prices and the changes in the supply and cost of raw
materials, including scrap steel; (3) market demand for steel
products; and (4) energy costs and availability. These and
other factors are discussed in Nucor's regulatory filings with the
Securities and Exchange Commission, including those in Nucor's
fiscal 2015 Annual Report on Form 10-K, Item 1A. Risk
Factors. The forward-looking statements contained in this
news release speak only as of this date, and Nucor does not assume
any obligation to update them.
You are invited to listen to the live broadcast of Nucor's
conference call in which management will discuss Nucor's fourth
quarter results on January 31, 2017
at 2:00 p.m. eastern time. The
conference call will be available over the Internet at
www.nucor.com, under Investor Relations.
TONNAGE
DATA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended December 31,
|
|
Year Ended
December 31,
|
|
|
|
2016
|
|
2015
|
|
Percentage
Change
|
|
2016
|
|
2015
|
|
Percentage
Change
|
Steel mills
production
|
|
4,990
|
|
4,398
|
|
13%
|
|
21,282
|
|
19,294
|
|
10%
|
Steel mills total
shipments
|
|
5,151
|
|
4,459
|
|
16%
|
|
21,941
|
|
19,860
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales tons to
outside customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
mills
|
|
4,400
|
|
3,823
|
|
15%
|
|
18,846
|
|
17,006
|
|
11%
|
|
Joist
|
|
123
|
|
117
|
|
5%
|
|
445
|
|
427
|
|
4%
|
|
Deck
|
|
110
|
|
110
|
|
0%
|
|
442
|
|
401
|
|
10%
|
|
Cold
finished
|
|
98
|
|
95
|
|
3%
|
|
426
|
|
449
|
|
-5%
|
|
Fabricated
concrete
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinforcing
steel
|
|
258
|
|
265
|
|
-3%
|
|
1,115
|
|
1,190
|
|
-6%
|
|
Other
|
|
826
|
|
697
|
|
19%
|
|
3,035
|
|
3,207
|
|
-5%
|
|
|
|
5,815
|
|
5,107
|
|
14%
|
|
24,309
|
|
22,680
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015*
|
|
2016
|
|
2015*
|
|
|
|
|
|
|
|
|
Net
sales
|
$
3,956,538
|
|
$
3,456,713
|
|
$
16,208,122
|
|
$
16,439,276
|
|
|
|
|
|
|
|
|
Costs, expenses
and other:
|
|
|
|
|
|
|
|
Cost of
products sold
|
3,513,112
|
|
3,288,618
|
|
14,182,215
|
|
15,325,386
|
Marketing,
administrative and other expenses
|
156,082
|
|
89,197
|
|
596,761
|
|
458,989
|
Equity in
earnings of
|
|
|
|
|
|
|
|
unconsolidated
affiliates
|
(8,525)
|
|
(4,779)
|
|
(38,757)
|
|
(5,329)
|
Impairments
and losses on assets
|
-
|
|
237,133
|
|
-
|
|
244,833
|
Interest
expense, net
|
40,829
|
|
41,587
|
|
169,244
|
|
173,531
|
|
3,701,498
|
|
3,651,756
|
|
14,909,463
|
|
16,197,410
|
Earnings (loss)
before income taxes and
|
|
|
|
|
|
|
|
noncontrolling
interests
|
255,040
|
|
(195,043)
|
|
1,298,659
|
|
241,866
|
Provision for
income taxes
|
79,855
|
|
(39,937)
|
|
398,243
|
|
48,836
|
Net earnings
(loss)
|
175,185
|
|
(155,106)
|
|
900,416
|
|
193,030
|
Earnings
attributable to
|
|
|
|
|
|
|
|
noncontrolling
interests
|
15,546
|
|
32,375
|
|
104,145
|
|
112,306
|
Net earnings
(loss) attributable to
|
|
|
|
|
|
|
|
Nucor
stockholders
|
$
159,639
|
|
$
(187,481)
|
|
$
796,271
|
|
$
80,724
|
|
|
|
|
|
|
|
|
Net earnings
(loss) per share:
|
|
|
|
|
|
|
|
Basic
|
$0.50
|
|
($0.59)
|
|
$2.48
|
|
$0.25
|
Diluted
|
$0.50
|
|
($0.59)
|
|
$2.48
|
|
$0.25
|
|
|
|
|
|
|
|
|
Average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
319,921
|
|
320,629
|
|
319,563
|
|
320,565
|
Diluted
|
320,396
|
|
320,629
|
|
319,822
|
|
320,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* - The Company
changed its method of accounting for inventory from LIFO to FIFO
for all businesses using LIFO.
This change is reflected for the periods
presented.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015*
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
2,045,961
|
|
$
1,939,469
|
|
Short-term
investments
|
|
150,000
|
|
100,000
|
|
Accounts
receivable, net
|
|
1,631,676
|
|
1,383,823
|
|
Inventories,
net
|
|
2,479,958
|
|
2,245,469
|
|
Other
current assets
|
|
198,798
|
|
185,644
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
6,506,393
|
|
5,854,405
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
5,078,650
|
|
4,891,153
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,052,728
|
|
2,011,278
|
|
|
|
|
|
|
|
|
Other
intangible assets, net
|
|
866,835
|
|
770,672
|
|
|
|
|
|
|
|
|
Other
assets
|
|
718,912
|
|
799,461
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
15,223,518
|
|
$
14,326,969
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
|
$
17,959
|
|
$
51,315
|
|
Long-term
debt due within one year
|
|
600,000
|
|
-
|
|
Accounts
payable
|
|
838,109
|
|
566,527
|
|
Salaries,
wages and related accruals
|
|
428,829
|
|
289,004
|
|
Accrued
expenses and other current liabilities
|
|
505,069
|
|
478,327
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
2,389,966
|
|
1,385,173
|
|
|
|
|
|
|
|
|
Long-term
debt due after one year
|
|
3,739,141
|
|
4,337,145
|
|
|
|
|
|
|
|
|
Deferred
credits and other liabilities
|
|
839,703
|
|
754,774
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
6,968,810
|
|
6,477,092
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Nucor
stockholders' equity:
|
|
|
|
|
|
Common
stock
|
|
151,734
|
|
151,426
|
|
Additional
paid-in capital
|
|
1,974,672
|
|
1,918,970
|
|
Retained
earnings
|
|
7,630,916
|
|
7,316,910
|
|
Accumulated
other comprehensive loss,
|
|
|
|
|
|
|
net of
income taxes
|
|
(317,843)
|
|
(351,362)
|
|
Treasury
stock
|
|
(1,559,614)
|
|
(1,558,128)
|
|
|
Total Nucor
stockholders' equity
|
|
7,879,865
|
|
7,477,816
|
|
|
|
|
|
|
|
|
Noncontrolling interests
|
|
374,843
|
|
372,061
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
8,254,708
|
|
7,849,877
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
|
$
15,223,518
|
|
$
14,326,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* - The
Company changed its method of accounting for inventory from LIFO to
FIFO for all businesses using LIFO.
This change is reflected for the periods
presented.
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months (52
Weeks) Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31,
2016
|
|
Dec. 31,
2015*
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
900,416
|
|
$
193,030
|
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation
|
|
|
613,192
|
|
625,757
|
|
|
Amortization
|
|
|
73,862
|
|
74,260
|
|
|
Stock-based
compensation
|
56,511
|
|
45,794
|
|
|
Deferred income
taxes
|
|
70,777
|
|
(246,836)
|
|
|
Distributions from
affiliates
|
40,602
|
|
15,132
|
|
|
Equity in earnings
of unconsolidated affiliates
|
(38,757)
|
|
(5,329)
|
|
|
Impairments and
losses on assets
|
-
|
|
244,833
|
|
|
Changes in assets
and liabilities (exclusive of
|
|
|
|
|
|
acquisitions and
dispositions):
|
|
|
|
|
|
|
Accounts
receivable
|
|
(208,984)
|
|
655,489
|
|
|
|
Inventories
|
|
(132,639)
|
|
1,061,202
|
|
|
|
Accounts
payable
|
|
228,036
|
|
(438,788)
|
|
|
|
Federal income
taxes
|
|
3,555
|
|
62,656
|
|
|
|
Salaries, wages
and related accruals
|
133,544
|
|
(56,267)
|
|
|
|
Other operating
activities
|
(2,582)
|
|
(73,890)
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
1,737,533
|
|
2,157,043
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
Capital
expenditures
|
|
(604,840)
|
|
(374,123)
|
|
Investment in and
advances to affiliates
|
(63,167)
|
|
(80,409)
|
|
Divestiture of
affiliates
|
|
135,000
|
|
-
|
|
Disposition of
plant and equipment
|
18,571
|
|
29,390
|
|
Acquisitions (net
of cash acquired)
|
(474,788)
|
|
(19,089)
|
|
Purchases of
investments
|
|
(650,000)
|
|
(111,927)
|
|
Proceeds from the
sale of investments
|
600,000
|
|
111,452
|
|
Other investing
activities
|
|
14,106
|
|
3,010
|
|
|
|
|
|
|
|
|
|
Cash used in
investing activities
|
|
(1,025,118)
|
|
(441,696)
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
Net change in
short-term debt
|
|
(33,360)
|
|
(155,816)
|
|
Repayment of
long-term debt
|
|
-
|
|
(16,300)
|
|
Issuance of common
stock
|
|
15,751
|
|
424
|
|
Excess tax
benefits from stock-based compensation
|
2,784
|
|
2,000
|
|
Distributions to
noncontrolling interests
|
(99,588)
|
|
(71,938)
|
|
Cash
dividends
|
|
|
(481,083)
|
|
(479,432)
|
|
Acquisition of
treasury stock
|
|
(5,173)
|
|
(66,505)
|
|
Other financing
activities
|
|
(13,297)
|
|
(2,184)
|
|
|
|
|
|
|
|
|
|
Cash used in
financing activities
|
|
(613,966)
|
|
(789,751)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
8,043
|
|
(10,271)
|
|
|
|
|
|
|
|
|
|
Increase in cash
and cash equivalents
|
106,492
|
|
915,325
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - beginning of year
|
1,939,469
|
|
1,024,144
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents - end of year
|
$
2,045,961
|
|
$
1,939,469
|
|
|
|
|
|
|
|
|
|
Non-cash investing
activity:
|
|
|
|
|
|
Change in accrued
plant and equipment purchases
|
$
12,837
|
|
$
(9,355)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* - The Company
changed its method of accounting for inventory from LIFO to FIFO
for all businesses using LIFO.
This change is reflected for the periods
presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nucor-reports-results-for-fourth-quarter-and-year-ended-2016-300399432.html
SOURCE Nucor Corporation