FORT WAYNE, Ind., April 18, 2018 /PRNewswire/ -- Steel Dynamics,
Inc. (NASDAQ/GS: STLD) today announced first quarter 2018 financial
results. The company reported first quarter 2018 net sales of
$2.6 billion and net income of
$228 million, or $0.96 per diluted share. Comparatively,
prior year first quarter net income was $201
million, or $0.82 per diluted
share, with net sales of $2.4
billion. Sequential fourth quarter 2017 net income was
$305 million, or $1.28 per diluted share, which included debt
refinancing charges of $0.02 per
diluted share and a one-time tax benefit of $0.76 per diluted share, associated with the
revaluation of deferred tax assets and liabilities in connection
with the U.S. Federal Tax Cuts and Jobs Act of 2017.
Excluding these items, the company's adjusted fourth quarter 2017
net income was $128 million, or
$0.54 per diluted share.
"The team delivered a tremendous first quarter performance,"
said Mark D. Millett, President and
Chief Executive Officer. "Our first quarter 2018 income from
operations increased 65 percent sequentially to $323 million, with adjusted EBITDA of
$400 million. During the first
quarter, we saw improved demand and product pricing across the
entire steel platform. The increase in earnings was
principally driven by our flat roll operations, as improved demand
and pricing, supported meaningful volume and margin
expansion. Domestic steel consumption remained strong from
the automotive and construction sectors, while energy and general
industrial demand continued to grow.
"Operating income from our metals recycling platform increased
24 percent sequentially in the first quarter 2018, as domestic
steel mill utilization improved, strengthening ferrous scrap
shipments and metal spread," continued Millett. "Our
fabrication platform also delivered a solid performance, as
operating income decreased only slightly as a result of seasonally
lower shipments. Our fabrication order backlog remains strong
heading into the summer construction season, and our fabrication
customer base continues to be optimistic concerning 2018
projects."
The company generated solid cash flow from operations of
$178 million during the first quarter
2018. As evidence of the confidence in the company's sustainable
long-term cash flow generation capability, the board of directors
approved a 21 percent increase in the company's first quarter 2018
cash dividend, reflecting the strength of the company's capital
structure and liquidity profile, and the continued optimism and
confidence in its future prospects.
First Quarter 2018 Comments
First quarter 2018 operating income for the company's steel
operations increased 63 percent sequentially to $338 million, based on a seven percent increase
in shipments and metal spread expansion, as average steel product
pricing increased more than consumed raw material scrap
costs. The first quarter 2018 average product selling price
for the company's steel operations increased $61 to $822 per
ton. The average ferrous scrap cost per ton melted increased
$21 to $321 per ton.
First quarter 2018 operating income attributable to the
company's flat roll steel operations increased over 70 percent
sequentially, driven by metal spread expansion related to higher
selling values and a five percent increase in shipments. Operating
income from the company's long product steel operations increased
over 25 percent, as a result of improved shipments and metal spread
expansion, primarily from the company's Engineered Bar Products and
Roanoke Bar divisions. The company's steel production
utilization rate was 94 percent in the first quarter 2018, compared
to the estimated domestic steel industry utilization rate of 76
percent.
First quarter 2018 operating income from the company's metals
recycling operations increased to $28
million, compared to $22
million in the sequential fourth quarter, based on higher
average selling values and a seven percent increase in recycled
ferrous shipments, resulting from strong domestic steel mill
demand.
The company's fabrication operations recorded first quarter 2018
operating income of $20 million,
compared to sequential fourth quarter results of $22 million, as improved average selling values
were more than offset by seasonally lower shipments.
Outlook
"We remain confident that current and anticipated macroeconomic
and market conditions are in place to benefit domestic steel
consumption in 2018," said Millett. "Domestic steel inventory
levels remain reasonably balanced. World steel demand and
pricing have improved. Based on strong domestic steel demand
fundamentals and customer optimism, we believe price momentum and
growth in steel consumption will continue during the year. We also
believe recent U.S. Federal Administration steel trade actions will
result in reduced imports during the year, and that tax reform will
provide a stimulus for additional domestic fixed asset investment
and growth. In combination with our expansion initiatives, we
believe there are firm drivers for our growth in 2018.
"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 2018 operating and financial results on Thursday, April 19, 2018, 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 24, 2018.
About Steel Dynamics, Inc.
Steel Dynamics 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 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 and Adjusted 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, manufacturing, appliance, pipe and tube, and other
steel-consuming industries; (4) fluctuation in the cost of key
raw materials and supplies (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.
Steel Dynamics,
Inc.
|
CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three
Months
|
|
March
31,
|
|
Ended
|
|
2018
|
|
2017
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
2,603,875
|
|
$
|
2,368,216
|
|
$
|
2,336,479
|
Costs of goods
sold
|
|
2,140,459
|
|
|
1,896,062
|
|
|
2,015,655
|
Gross profit
|
|
463,416
|
|
|
472,154
|
|
|
320,824
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
106,431
|
|
|
102,933
|
|
|
96,209
|
Profit
sharing
|
|
26,662
|
|
|
27,231
|
|
|
21,595
|
Amortization of
intangible assets
|
|
6,926
|
|
|
7,424
|
|
|
7,073
|
Operating
income
|
|
323,397
|
|
|
334,566
|
|
|
195,947
|
|
|
|
|
|
|
|
|
|
Interest expense, net
of capitalized interest
|
|
31,896
|
|
|
33,973
|
|
|
32,380
|
Other expense
(income), net
|
|
(4,463)
|
|
|
(3,659)
|
|
|
2,215
|
Income before income taxes
|
|
295,964
|
|
|
304,252
|
|
|
161,352
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
|
70,489
|
|
|
105,586
|
|
|
(141,819)
|
Net income
|
|
225,475
|
|
|
198,666
|
|
|
303,171
|
Net loss attributable
to noncontrolling interests
|
|
2,076
|
|
|
2,151
|
|
|
1,562
|
Net income
attributable to Steel Dynamics, Inc.
|
$
|
227,551
|
|
$
|
200,817
|
|
$
|
304,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to
|
|
|
|
|
|
|
|
|
Steel
Dynamics, Inc. stockholders
|
$
|
0.96
|
|
$
|
0.83
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
236,623
|
|
|
242,943
|
|
|
237,177
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to
|
|
|
|
|
|
|
|
|
Steel
Dynamics, Inc. stockholders, including the effect
|
|
|
|
|
|
|
|
|
of
assumed conversions when dilutive
|
$
|
0.96
|
|
$
|
0.82
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares
|
|
|
|
|
|
|
|
|
and
share equivalents outstanding
|
|
237,723
|
|
|
244,546
|
|
|
238,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.1875
|
|
$
|
0.1550
|
|
$
|
0.1550
|
Steel Dynamics,
Inc.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
Assets
|
2018
|
|
|
2017
|
|
(unaudited)
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
985,824
|
|
|
$
|
1,028,649
|
Short
term investments
|
|
40,000
|
|
|
|
-
|
Accounts
receivable, net
|
|
987,655
|
|
|
|
868,837
|
Inventories
|
|
1,600,058
|
|
|
|
1,519,347
|
Other
current assets
|
|
38,705
|
|
|
|
91,509
|
Total current
assets
|
|
3,652,242
|
|
|
|
3,508,342
|
|
|
|
|
|
|
|
Property, plant
and equipment, net
|
|
2,657,937
|
|
|
|
2,675,904
|
|
|
|
|
|
|
|
Intangible assets,
net
|
|
249,983
|
|
|
|
256,909
|
|
|
|
|
|
|
|
Goodwill
|
|
386,045
|
|
|
|
386,893
|
|
|
|
|
|
|
|
Other
assets
|
|
26,606
|
|
|
|
27,684
|
Total
assets
|
$
|
6,972,813
|
|
|
$
|
6,855,732
|
Liabilities and
Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
|
562,618
|
|
|
$
|
489,448
|
Income
taxes payable
|
|
14,564
|
|
|
|
3,696
|
Accrued
expenses
|
|
273,912
|
|
|
|
346,580
|
Current
maturities of long-term debt
|
|
9,646
|
|
|
|
28,795
|
Total current
liabilities
|
|
860,740
|
|
|
|
868,519
|
|
|
|
|
|
|
|
Long-term
debt
|
|
2,353,703
|
|
|
|
2,353,145
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
314,736
|
|
|
|
305,949
|
|
|
|
|
|
|
|
Other
liabilities
|
|
20,257
|
|
|
|
21,811
|
Total
liabilities
|
|
3,549,436
|
|
|
|
3,549,424
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
111,240
|
|
|
|
111,240
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Common
stock
|
|
644
|
|
|
|
644
|
Treasury
stock, at cost
|
|
(730,700)
|
|
|
|
(665,297)
|
Additional paid-in capital
|
|
1,142,871
|
|
|
|
1,141,534
|
Retained
earnings
|
|
3,057,904
|
|
|
|
2,874,693
|
Total Steel Dynamics,
Inc. equity
|
|
3,470,719
|
|
|
|
3,351,574
|
Noncontrolling interests
|
|
(158,582)
|
|
|
|
(156,506)
|
Total
equity
|
|
3,312,137
|
|
|
|
3,195,068
|
Total liabilities
and equity
|
$
|
6,972,813
|
|
|
$
|
6,855,732
|
Steel Dynamics,
Inc.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
Net
income
|
$
|
225,475
|
|
$
|
198,666
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided
by
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
76,135
|
|
|
75,057
|
Equity-based
compensation
|
|
12,841
|
|
|
11,303
|
Deferred income
taxes
|
|
9,545
|
|
|
7,716
|
Other
adjustments
|
|
30
|
|
|
(104)
|
Changes in certain
assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(118,818)
|
|
|
(153,364)
|
Inventories
|
|
(80,711)
|
|
|
(86,819)
|
Other assets
|
|
(105)
|
|
|
2,094
|
Accounts payable
|
|
66,332
|
|
|
133,809
|
Income taxes receivable/payable
|
|
63,962
|
|
|
96,319
|
Accrued expenses
|
|
(76,751)
|
|
|
(44,247)
|
Net cash provided by
operating activities
|
|
177,935
|
|
|
240,430
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
(50,606)
|
|
|
(41,677)
|
Purchases of short term investments
|
|
(40,000)
|
|
|
-
|
Other
investing activities
|
|
229
|
|
|
26,918
|
Net cash used in
investing activities
|
|
(90,377)
|
|
|
(14,759)
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
Issuance
of current and long-term debt
|
|
93,058
|
|
|
-
|
Repayment of current and long-term debt
|
|
(113,034)
|
|
|
(1,429)
|
Dividends paid
|
|
(36,797)
|
|
|
(34,130)
|
Purchase
of treasury stock
|
|
(69,269)
|
|
|
(61,256)
|
Other
financing activities
|
|
(5,180)
|
|
|
(3,532)
|
Net cash used in
financing activities
|
|
(131,222)
|
|
|
(100,347)
|
|
|
|
|
|
|
Increase (decrease)
in cash and equivalents
|
|
(43,664)
|
|
|
125,324
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
|
1,035,085
|
|
|
848,105
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
|
991,421
|
|
$
|
973,429
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure information:
|
|
|
|
|
|
Cash
paid for interest
|
$
|
8,629
|
|
$
|
12,649
|
Cash
paid (received) for income taxes, net
|
$
|
(1,045)
|
|
$
|
1,554
|
Steel Dynamics,
Inc.
|
SUPPLEMENTAL
INFORMATION
|
(dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
4Q 2017
|
External Net
Sales
|
|
|
|
|
|
|
|
|
|
Steel
|
|
$
|
1,921,790
|
|
$
|
1,721,333
|
|
$
|
1,669,384
|
Fabrication
|
|
|
201,492
|
|
|
194,096
|
|
|
220,515
|
Metals
Recycling
|
|
|
388,122
|
|
|
363,836
|
|
|
354,460
|
Other
|
|
|
92,471
|
|
|
88,951
|
|
|
92,120
|
Consolidated
|
|
$
|
2,603,875
|
|
$
|
2,368,216
|
|
$
|
2,336,479
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
|
|
|
|
|
Steel
|
|
$
|
338,357
|
|
$
|
352,423
|
|
$
|
207,358
|
Fabrication
|
|
|
19,832
|
|
|
23,767
|
|
|
21,601
|
Metals
Recycling
|
|
|
27,805
|
|
|
21,341
|
|
|
22,379
|
Operations
|
|
|
385,994
|
|
|
397,531
|
|
|
251,338
|
|
|
|
|
|
|
|
|
|
|
Non-cash Amortization
of Intangible Assets
|
|
|
(6,926)
|
|
|
(7,424)
|
|
|
(7,073)
|
Profit Sharing
Expense
|
|
|
(26,662)
|
|
|
(27,231)
|
|
|
(21,595)
|
Non-segment
Operations
|
|
|
(29,009)
|
|
|
(28,310)
|
|
|
(26,723)
|
Consolidated
Operating Income
|
|
$
|
323,397
|
|
$
|
334,566
|
|
$
|
195,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
Earnings Before
Taxes
|
|
$
|
295,964
|
|
$
|
304,252
|
|
$
|
161,352
|
Net Interest
Expense
|
|
|
27,482
|
|
|
32,333
|
|
|
28,990
|
Depreciation
|
|
|
67,823
|
|
|
66,269
|
|
|
66,460
|
Amortization of
Intangible Assets
|
|
|
6,926
|
|
|
7,424
|
|
|
7,073
|
Non-controlling
Interest
|
|
|
2,077
|
|
|
2,152
|
|
|
1,562
|
EBITDA
|
|
|
400,272
|
|
|
412,430
|
|
|
265,437
|
Non-cash
Adjustments
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging (Gain) Loss
|
|
|
(9,956)
|
|
|
(637)
|
|
|
7,325
|
Inventory Valuation
|
|
200
|
|
|
162
|
|
|
198
|
Equity-based Compensation
|
|
|
9,580
|
|
|
9,074
|
|
|
11,636
|
Financing Expenses
|
|
|
-
|
|
|
-
|
|
|
1,242
|
Adjusted
EBITDA
|
|
$
|
400,096
|
|
$
|
421,029
|
|
$
|
285,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Information
|
|
|
|
|
|
|
|
|
|
Steel
|
|
|
|
|
|
|
|
|
|
Average External Sales
Price (Per ton)
|
|
$
|
822
|
|
$
|
743
|
|
$
|
761
|
Average Ferrous Cost
(Per ton melted)
|
|
$
|
321
|
|
$
|
264
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
|
Flat Roll
Shipments
|
|
|
1,743,576
|
|
|
1,735,954
|
|
|
1,659,049
|
Long Product
Shipments
|
|
|
|
|
|
|
|
|
|
Structural and Rail Division
|
|
|
368,783
|
|
|
350,555
|
|
|
339,597
|
Engineered Bar Products Division
|
|
|
215,150
|
|
|
192,140
|
|
|
191,652
|
Roanoke Bar Division
|
|
|
123,403
|
|
|
125,869
|
|
|
107,319
|
Steel of West Virginia
|
|
|
83,732
|
|
|
77,229
|
|
|
66,724
|
Total Shipments
(Tons)
|
|
|
2,534,644
|
|
|
2,481,747
|
|
|
2,364,341
|
|
|
|
|
|
|
|
|
|
|
External Shipments
(Tons)
|
|
|
2,327,515
|
|
|
2,305,080
|
|
|
2,184,135
|
|
|
|
|
|
|
|
|
|
|
Steel Production (Tons)
|
|
|
2,601,200
|
|
|
2,544,082
|
|
|
2,437,851
|
|
|
|
|
|
|
|
|
|
|
Metals
Recycling
|
|
|
|
|
|
|
|
|
|
Total Nonferrous
Shipments (000's of pounds)
|
|
|
271,628
|
|
|
283,603
|
|
|
271,036
|
Total Ferrous
Shipments (Gross tons)
|
|
|
1,256,899
|
|
|
1,338,599
|
|
|
1,172,015
|
External Ferrous
Shipments (Gross tons)
|
|
|
436,990
|
|
|
485,414
|
|
|
429,512
|
|
|
|
|
|
|
|
|
|
|
Fabrication
|
|
|
|
|
|
|
|
|
|
Average External Sales
Price (Per ton)
|
|
$
|
1,345
|
|
$
|
1,291
|
|
$
|
1,335
|
Total Shipments
(Tons)
|
|
|
149,926
|
|
|
150,402
|
|
|
165,338
|
View original
content:http://www.prnewswire.com/news-releases/steel-dynamics-reports-first-quarter-2018-results-300632438.html
SOURCE Steel Dynamics, Inc.