FORT WAYNE, Ind., April 19, 2017 /PRNewswire/ -- Steel Dynamics,
Inc. (NASDAQ/GS: STLD) today announced first quarter 2017 financial
results. The company reported first quarter 2017 net income
of $201 million, or $0.82 per diluted share, with net sales of
$2.4 billion. Comparatively,
prior year first quarter net income was $63
million, or $0.26 per diluted
share, with net sales of $1.7
billion. Sequential fourth quarter 2016 net income was
$20 million, or $0.08 per diluted share, which included non-cash
goodwill and asset impairment charges of $0.31 per diluted share and debt refinancing and
repayment charges of $0.04 per
diluted share. Excluding these items, the company's adjusted
fourth quarter 2016 net income was $106
million, or $0.43 per diluted
share.
"The team executed well and delivered a strong first quarter
performance with all of our operating platforms improving
profitability," said Mark D.
Millett, President and Chief Executive Officer. "Our first
quarter 2017 income from operations increased over 75 percent
sequentially to $335 million with
adjusted EBITDA of $421
million. The increase in our earnings was principally
driven by our flat roll operations, as demand was strong and
customer inventory levels continued to be positioned at
historically low levels. We also experienced increased
shipments from our long product steel divisions. Steel demand
from the automotive sector remained steady and construction
continued to improve. Additionally, specific to our
Engineered Bar Products Division, there was an overall general
demand improvement, supported by positive movement in the heavy
equipment and energy
sectors.
"Operating income from our metals recycling platform more than
doubled in the first quarter 2017, as domestic steel mill
utilization increased, strengthening both ferrous scrap shipments
and metal spread," continued Millett. "Additionally, in what is
typically a seasonally lower demand timeframe for our fabrication
operations, the team achieved record quarterly shipments and
improved earnings, a strong indicator that the non-residential
construction market is continuing a positive growth profile."
The company generated strong cash flow from operations of
$240 million during the first quarter
2017. As evidence of the confidence in the company's sustainable
long-term cash flow generation capability, the board of directors
approved an 11 percent increase in the company's first quarter 2017
cash dividend, reflecting the strength of the company's capital
structure and liquidity profile, and the continued optimism and
confidence in its future prospects.
Additional First Quarter 2017 Comments
First quarter 2017 operating income for the company's steel
operations increased 62 percent to $352
million sequentially, based on a 12 percent increase in
shipments and metal spread expansion. The company's average
steel product price increased more than consumed raw material scrap
costs, resulting in steel metal spread expansion. The first
quarter 2017 average product selling price for the company's steel
operations increased $63 to
$743 per ton. The average
ferrous scrap cost per ton melted increased $44 to $264 per
ton.
First quarter 2017 operating income attributable to the
company's flat roll products increased 67 percent when compared to
the sequential fourth quarter, driven by an 11 percent increase in
shipments combined with metal spread expansion. Operating income
from long products increased 39 percent as a result of a 16 percent
improvement in shipments, primarily from the company's Engineered
Bar Products and Structural and Rail divisions. Long product
steel selling values remain under pressure from excess domestic
production capability, coupled with elevated import levels.
The company's steel production utilization rate was 95 percent in
the first quarter 2017, compared to 81 percent in the sequential
fourth quarter and compared to the domestic industry utilization
rate of 75 percent.
First quarter 2017 operating income from the metals recycling
operations was $21 million, compared
to $10 million in the sequential
fourth quarter (excluding a non-cash goodwill impairment charge
of $5.5 million). Both
ferrous scrap demand and pricing increased as domestic steel mill
utilization improved.
The company's fabrication operations recorded first quarter 2017
operating income of $24 million,
compared to sequential fourth quarter results of $18 million. Despite what is typically a
lower demand season, the platform achieved record quarterly
shipments, which more than offset moderate margin compression as
product pricing declined slightly more than steel input
costs.
Outlook
"The company believes that current and anticipated macroeconomic
and market conditions are in place to benefit the domestic steel
industry in the coming year," said Millett. "Although
domestic automotive production may be coming off record levels, we
believe 2017 North American automotive steel consumption will be
steady, and that there will be additional growth in the
construction sector, especially for larger, public sector
infrastructure projects. Additionally, the energy sector has
begun to strengthen.
"We continue to see progress at our Columbus Flat Roll
Division. The successful market and product diversification
achieved at Columbus will continue
to benefit the coming years as we have accessed numerous new
customers and end markets. The Columbus team completed construction of a
$100 million paint line in the fourth
quarter 2016, adding 250,000 tons of value-added painting
capability. Start-up is going well, with painted shipments of just
under 13,000 tons in the first quarter.
"We continue to strengthen our financial position through strong
cash flow generation and the execution of our long-term strategy.
We are well-positioned for growth, and remain focused on delivering
shareholder value through organic and strategic growth
opportunities," concluded Millett.
Conference Call and Webcast
Steel Dynamics, Inc. will hold a conference call to discuss
first quarter 2017 operating and financial results on Thursday, April 20, 2017, at 10:00
a.m. Eastern Time. You may access the call and find
dial-in information on the Investors section of the company's
website at www.steeldynamics.com. A replay of the call will
be available on our website until 11:59 p.m. Eastern Time on
April 25, 2017.
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 facilities located throughout
the United States, and in
Mexico. Steel Dynamics produces steel products, including hot
roll, cold roll, and coated sheet steel, structural steel beams and
shapes, rail, engineered special-bar-quality steel, cold finished
steel, merchant bar products, specialty steel sections and steel
joists and deck. In addition, the company produces liquid pig
iron and processes and sells ferrous and nonferrous scrap.
Note Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). Management
believes that Adjusted Operating Income, Adjusted Net Income,
Adjusted Diluted Earnings Per Share, EBITDA and Adjusted EBITDA,
non-GAAP financial measures, provide additional meaningful
information regarding the company's performance and financial
strength. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the company's reported results
prepared in accordance with GAAP. In addition, because not
all companies use identical calculations, EBITDA included in this
release may not be comparable to similarly titled measures of other
companies.
Forward-Looking Statements
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, which we
generally precede or accompany by such typical conditional words as
"anticipate," "intend," "believe," "estimate," "plan," "seek,"
"project" or "expect," or by the words "may," "will," or "should,"
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 non-residential 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 Steel Dynamics' 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 under the
headings Special Note Regarding Forward-Looking Statements
and Risk Factors, 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: Investors: SEC Filings.
Contact: Tricia Meyers,
Investor Relations Manager— +1.260.969.3500
Steel Dynamics,
Inc.
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three
Months
|
|
March
31,
|
|
Ended
|
|
2017
|
|
2016
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
2,368,216
|
|
$
|
1,741,301
|
|
$
|
1,910,596
|
Costs of goods
sold
|
|
1,896,062
|
|
|
1,505,265
|
|
|
1,600,654
|
Gross profit
|
|
472,154
|
|
|
236,036
|
|
|
309,942
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
102,933
|
|
|
87,530
|
|
|
94,110
|
Profit
sharing
|
|
27,231
|
|
|
9,291
|
|
|
19,563
|
Amortization of
intangible assets
|
|
7,424
|
|
|
7,250
|
|
|
7,406
|
Asset impairment
charges
|
|
-
|
|
|
-
|
|
|
132,839
|
Operating income
|
|
334,566
|
|
|
131,965
|
|
|
56,024
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
|
33,973
|
|
|
37,043
|
|
|
36,149
|
Other expense
(income), net
|
|
(3,659)
|
|
|
(1,792)
|
|
|
17,055
|
Income before income taxes
|
|
304,252
|
|
|
96,714
|
|
|
2,820
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
105,586
|
|
|
35,396
|
|
|
(1,012)
|
Net income
|
|
198,666
|
|
|
61,318
|
|
|
3,832
|
Net loss attributable
to noncontrolling interests
|
|
2,151
|
|
|
1,419
|
|
|
16,180
|
Net income
attributable to Steel Dynamics, Inc.
|
$
|
200,817
|
|
$
|
62,737
|
|
$
|
20,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to
|
|
|
|
|
|
|
|
|
Steel
Dynamics, Inc. stockholders
|
$
|
0.83
|
|
$
|
0.26
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
242,943
|
|
|
243,202
|
|
|
243,687
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to
|
|
|
|
|
|
|
|
|
Steel
Dynamics, Inc. stockholders, including the effect
|
|
|
|
|
|
|
|
|
of
assumed conversions when dilutive
|
$
|
0.82
|
|
$
|
0.26
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares
|
|
|
|
|
|
|
|
|
and
share equivalents outstanding
|
|
244,546
|
|
|
244,608
|
|
|
245,511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.155
|
|
$
|
0.140
|
|
$
|
0.140
|
Steel Dynamics,
Inc.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
2017
|
|
|
2016
|
Assets
|
(unaudited)
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
966,826
|
|
|
$
|
841,483
|
Accounts
receivable, net
|
|
883,147
|
|
|
|
729,784
|
Inventories
|
|
1,361,550
|
|
|
|
1,275,211
|
Other
current assets
|
|
33,442
|
|
|
|
83,197
|
Total current
assets
|
|
3,244,965
|
|
|
|
2,929,675
|
|
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
2,760,544
|
|
|
|
2,787,215
|
|
|
|
|
|
|
|
Restricted
cash
|
|
17,846
|
|
|
|
18,060
|
|
|
|
|
|
|
|
Intangible assets,
net
|
|
276,553
|
|
|
|
283,977
|
|
|
|
|
|
|
|
Goodwill
|
|
391,740
|
|
|
|
393,351
|
|
|
|
|
|
|
|
Other
assets
|
|
12,387
|
|
|
|
11,454
|
Total
assets
|
$
|
6,704,035
|
|
|
$
|
6,423,732
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
|
530,958
|
|
|
$
|
395,196
|
Income
taxes payable
|
|
80,741
|
|
|
|
5,593
|
Accrued
expenses
|
|
266,783
|
|
|
|
308,394
|
Current
maturities of long-term debt
|
|
2,965
|
|
|
|
3,632
|
Total current
liabilities
|
|
881,447
|
|
|
|
712,815
|
|
|
|
|
|
|
|
Long-term
debt
|
|
2,353,744
|
|
|
|
2,353,194
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
454,426
|
|
|
|
448,375
|
|
|
|
|
|
|
|
Other
liabilities
|
|
19,711
|
|
|
|
20,649
|
Total
liabilities
|
|
3,709,328
|
|
|
|
3,535,033
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
111,240
|
|
|
|
111,240
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Common
stock
|
|
641
|
|
|
|
641
|
Treasury
stock, at cost
|
|
(475,072)
|
|
|
|
(416,829)
|
Additional paid-in capital
|
|
1,135,892
|
|
|
|
1,132,749
|
Retained
earnings
|
|
2,373,718
|
|
|
|
2,210,459
|
Total Steel Dynamics,
Inc. equity
|
|
3,035,179
|
|
|
|
2,927,020
|
Noncontrolling interests
|
|
(151,712)
|
|
|
|
(149,561)
|
Total
equity
|
|
2,883,467
|
|
|
|
2,777,459
|
Total liabilities
and equity
|
$
|
6,704,035
|
|
|
$
|
6,423,732
|
Steel Dynamics,
Inc.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
Net
income
|
$
|
198,666
|
|
$
|
61,318
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided
by
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
75,057
|
|
|
73,985
|
Equity-based
compensation
|
|
11,303
|
|
|
10,534
|
Deferred income
taxes
|
|
7,716
|
|
|
17,087
|
Other
adjustments
|
|
(104)
|
|
|
180
|
Changes in certain
assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(153,364)
|
|
|
(75,596)
|
Inventories
|
|
(86,819)
|
|
|
82,567
|
Other assets
|
|
2,113
|
|
|
548
|
Accounts payable
|
|
133,809
|
|
|
112,659
|
Income taxes receivable/payable
|
|
96,319
|
|
|
13,993
|
Accrued expenses
|
|
(44,247)
|
|
|
(6,247)
|
Net cash provided by
operating activities
|
|
240,449
|
|
|
291,028
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
(41,677)
|
|
|
(27,708)
|
Other
investing activities
|
|
26,918
|
|
|
3,054
|
Net cash used in
investing activities
|
|
(14,759)
|
|
|
(24,654)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Issuance
of current and long-term debt
|
|
-
|
|
|
20,452
|
Repayment of current and long-term debt
|
|
(1,429)
|
|
|
(4,232)
|
Dividends paid
|
|
(34,130)
|
|
|
(33,425)
|
Purchase
of treasury stock
|
|
(61,256)
|
|
|
-
|
Other
financing activities
|
|
(3,532)
|
|
|
750
|
Net cash used in
financing activities
|
|
(100,347)
|
|
|
(16,455)
|
|
|
|
|
|
|
Increase in cash and
equivalents
|
|
125,343
|
|
|
249,919
|
Cash and equivalents
at beginning of period
|
|
841,483
|
|
|
727,032
|
Cash and
equivalents at end of period
|
$
|
966,826
|
|
$
|
976,951
|
|
|
|
|
|
|
Supplemental
disclosure information:
|
|
|
|
|
|
Cash
paid for interest
|
$
|
12,649
|
|
$
|
26,286
|
Cash
paid for income taxes, net
|
$
|
1,554
|
|
$
|
699
|
Supplemental
Information (dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
4Q 2016
|
|
External Net
Sales
|
|
|
|
|
|
Steel
|
|
$
|
1,721,333
|
|
$
|
1,217,176
|
|
$
|
1,393,329
|
|
Fabrication
|
|
|
194,096
|
|
|
180,055
|
|
|
173,015
|
|
Metals
Recycling
|
|
|
363,836
|
|
|
269,407
|
|
|
282,783
|
|
Other
|
|
|
88,951
|
|
|
74,663
|
|
|
61,469
|
|
Consolidated
|
|
$
|
2,368,216
|
|
$
|
1,741,301
|
|
$
|
1,910,596
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
|
|
|
Steel
|
|
$
|
352,423
|
|
$
|
135,692
|
|
$
|
217,778
|
|
Fabrication
|
|
|
23,767
|
|
|
32,075
|
|
|
17,766
|
|
Metals
Recycling
|
|
|
21,341
|
|
|
6,360
|
|
|
9,511
|
|
Metals Recycling
Impairment
|
|
|
-
|
|
|
-
|
|
|
(5,500)
|
|
Operations
|
|
|
397,531
|
|
|
174,127
|
|
|
239,555
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash Amortization
of Intangible Assets
|
|
|
(7,424)
|
|
|
(7,100)
|
|
|
(7,406)
|
|
Profit Sharing
Expense
|
|
|
(27,231)
|
|
|
(9,291)
|
|
|
(19,563)
|
|
Non-segment
Operations
|
|
|
(28,310)
|
|
|
(25,771)
|
|
|
(29,223)
|
|
Minnesota Impairment Charges
|
|
|
-
|
|
|
-
|
|
|
(127,339)
|
|
Consolidated
Operating Income
|
|
|
334,566
|
|
|
131,965
|
|
|
56,024
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash Impairment
Charges
|
|
|
-
|
|
|
-
|
|
|
132,839
|
|
Adjusted Operating
Income
|
|
$
|
334,566
|
|
$
|
131,965
|
|
$
|
188,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
Earnings Before
Taxes
|
|
$
|
304,252
|
|
$
|
96,714
|
|
$
|
2,820
|
|
Net Interest
Expense
|
|
|
32,333
|
|
|
36,150
|
|
|
34,752
|
|
Depreciation
|
|
|
66,269
|
|
|
65,375
|
|
|
64,199
|
|
Amortization of
Intangible Assets
|
|
|
7,424
|
|
|
7,100
|
|
|
7,406
|
|
Non-controlling
Interest
|
|
|
2,152
|
|
|
1,419
|
|
|
16,180
|
|
EBITDA
|
|
|
412,430
|
|
|
206,758
|
|
|
125,357
|
|
Non-cash
Adjustments
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging (Gain) Loss
|
|
|
(637)
|
|
|
319
|
|
|
(143)
|
|
Inventory Valuation
|
|
162
|
|
|
192
|
|
|
154
|
|
Asset Impairment Charges
|
|
|
-
|
|
|
-
|
|
|
119,764
|
|
Equity-based Compensation
|
|
|
9,074
|
|
|
6,979
|
|
|
10,069
|
|
Financing Expenses
|
|
|
-
|
|
|
-
|
|
|
3,104
|
|
Adjusted
EBITDA
|
|
$
|
421,029
|
|
$
|
214,248
|
|
$
|
258,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Information
|
|
|
|
|
|
|
|
|
|
|
Steel
|
|
|
|
|
|
|
|
|
|
|
Average External Sales
Price (Per ton)
|
|
$
|
743
|
|
$
|
574
|
|
$
|
680
|
|
Average Ferrous Cost
(Per ton melted)
|
|
$
|
264
|
|
$
|
184
|
|
$
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat Roll
Shipments
|
|
|
1,735,954
|
|
|
1,657,341
|
|
|
1,565,157
|
|
Long Product
Shipments
|
|
|
|
|
|
|
|
|
|
|
Structural and Rail Division
|
|
|
350,555
|
|
|
292,988
|
|
|
319,265
|
|
Engineered Bar Products Division
|
|
|
192,140
|
|
|
125,200
|
|
|
134,262
|
|
Roanoke Bar Division
|
|
|
125,869
|
|
|
125,471
|
|
|
112,007
|
|
Steel of West Virginia
|
|
|
77,229
|
|
|
76,209
|
|
|
75,453
|
|
Total Shipments
(In tons)
|
|
|
2,481,747
|
|
|
2,277,209
|
|
|
2,206,144
|
|
|
|
|
|
|
|
|
|
|
|
|
External Shipments
(In tons)
|
|
|
2,305,080
|
|
|
2,121,872
|
|
|
2,041,078
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel Production (In tons)
|
|
|
2,544,082
|
|
|
2,363,252
|
|
|
2,237,200
|
|
|
|
|
|
|
|
|
|
|
|
|
Metals
Recycling
|
|
|
|
|
|
|
|
|
|
|
Total Nonferrous
Shipments (In 000's of pounds)
|
|
|
283,603
|
|
|
270,410
|
|
|
274,790
|
|
Total Ferrous
Shipments (In gross tons)
|
|
|
1,338,599
|
|
|
1,305,154
|
|
|
1,175,625
|
|
External Ferrous
Shipments (In gross tons)
|
|
|
485,414
|
|
|
503,787
|
|
|
446,232
|
|
|
|
|
|
|
|
|
|
|
|
|
Fabrication
|
|
|
|
|
|
|
|
|
|
|
Average External Sales
Price (Per ton)
|
|
$
|
1,291
|
|
$
|
1,241
|
|
$
|
1,310
|
|
Total Shipments
(In tons)
|
|
|
150,402
|
|
|
145,126
|
|
|
132,186
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/steel-dynamics-reports-first-quarter-2017-results-300442285.html
SOURCE Steel Dynamics, Inc.