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Press release from PR Newswire

Nucor Reports Stronger Results for First Quarter of 2011

Thursday, April 21, 2011

Nucor Reports Stronger Results for First Quarter of 201109:00 EDT Thursday, April 21, 2011CHARLOTTE, N.C., April 21, 2011 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today consolidated net earnings of $159.8 million, or $0.50 per diluted share, for the first quarter of 2011, an increase of 416% over earnings of $31.0 million, or $0.10 per diluted share, in the first quarter of 2010.  Nucor reported a net loss of $11.4 million, or $0.04 per diluted share, in the fourth quarter of 2010.  Diluted earnings per share of $0.50 for the first quarter are greater than our guidance range of $0.30 to $0.35 per share due to March earnings in the steel mills segment exceeding expectations.Nucor incurred a charge to value inventories using the last-in, first-out (LIFO) method of accounting of $31.0 million ($0.06 per diluted share) in the first quarter of 2011, compared with a charge of $24.0 million ($0.05 per diluted share) in the first quarter of 2010 and a charge of $23.0 million ($0.04 per diluted share) in the fourth quarter of 2010.Pre-operating and start-up costs of new facilities were $27.9 million in the first quarter, compared with $50.5 million in the first quarter of 2010 and $39.0 million in the fourth quarter of 2010.  In 2011, these costs related to several projects, the largest of which was the galvanizing line in Decatur, Alabama.  The decrease in pre-operating and start-up costs was due to the improved performance at the special bar quality ("SBQ") mill in Memphis, Tennessee and the wire rod products mill in Kingman, Arizona.Nucor's consolidated net sales increased 32% to $4.83 billion compared with $3.65 billion in the first quarter of 2010 due to a 22% increase in average sales price per ton and a 9% increase in total tons shipped to outside customers.  Consolidated net sales increased 25% compared with $3.85 billion in the fourth quarter of 2010 due to a 12% increase in both total tons shipped to outside customers and in average sales price per ton.The average scrap and scrap substitute cost per ton used during the first quarter of 2011 was $424, an increase of 33% compared to $318 in the first quarter of 2010 and an increase of 18% over $359 in the fourth quarter of 2010.    Overall operating rates at our steel mills increased to approximately 80% in the first quarter of 2011, compared to 73% in the first quarter of 2010 and 68% in the fourth quarter of 2010.  As a result of this increased utilization, total energy costs decreased approximately $1 per ton from the first quarter of 2010.  Total energy costs per ton were unchanged from the fourth quarter of 2010. In January, Nucor received an air quality permit from the Louisiana Department of Environmental Quality for the direct reduced iron ("DRI") making facility that will be located in St. James Parish, Louisiana. The permit allows for the construction and operation of two plants with a combined annual DRI production of 5,500,000 tons.  Nucor broke ground on a 2,500,000-ton DRI facility in March.  In addition to a second DRI facility, future plans for the Louisiana site may include a coke plant, blast furnace, pellet plant and steel mill.Our liquidity position remains strong with $2.3 billion in cash and cash equivalents and short-term investments and an untapped $1.3 billion revolving credit facility that matures in November 2012. In addition, we have $576.5 million in restricted cash related to proceeds received from the November 2010 issuance of Gulf Opportunity Zone Bonds that will be used to partially fund the capital costs associated with the DRI facility in Louisiana. In February, Nucor's board declared a cash dividend of $0.3625 per share payable on May 11, 2011 to stockholders of record on March 31, 2011.  This dividend is Nucor's 152nd consecutive quarterly cash dividend, a record we expect to continue.Profitability improved significantly as we progressed through the quarter, as utilization rates increased and as price increases for steel mill products caught up with higher raw material costs. Although we are seeing some signs of market weakness that may impact results near the end of the second quarter, we expect second quarter results to be an improvement over the first quarter.  We continue to see slow, steady improvement in real demand in certain end markets.  This is most evident in products sold to the manufacturing/industrial sector, including special bar quality products, sheet and plate.  We are keeping a watchful eye on imports as any measurable increase in import levels will be a threat to current market stability, particularly in the sheet markets.  The most challenging markets for our products continue to be those associated with residential and non-residential construction.  We will provide quantitative earnings guidance later in the quarter.Nucor and 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; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; light gauge steel framing; steel grating and expanded metal; 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) 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; (2) market demand for steel products; (3) energy costs and availability; and (4) competitive pressure on sales and pricing, including competition from imports and substitute materials.  These and other factors are outlined in Nucor's regulatory filings with the Securities and Exchange Commission, including those in Nucor's December 31, 2010 Annual Report on Form 10-K.  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 first quarter results on April 21, 2011 at 2:00 p.m. eastern time.  The conference call will be available over the Internet at, under Investor Relations.  TONNAGE DATA (in thousands) Three Months (13 Weeks) Ended April 2, 2011April 3, 2010Percentage ChangeSteel  mills production5,2194,71211%Steel  mills total shipments5,2004,70610%Sales tons to outside customers:Steel  mills4,4184,0669%Joist675914%Deck72686%Cold finished13411121%Fabricated concretereinforcing steel22119414%Other1,0669997%5,9785,4979%Unaudited figures are as follows:CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)(In thousands, except per share data)  Three Months (13 Weeks) Ended  April 2, 2011April 3, 2010Net sales$  4,833,934$  3,654,842Costs, expenses and other:  Cost of products sold4,395,5253,442,047  Marketing, administrative and other expenses125,37892,594  Equity in losses of unconsolidated affiliates4,21018,377  Interest expense, net42,56637,7884,567,6793,590,806Earnings before income taxes andnoncontrolling interests266,25564,036Provision for income taxes85,13322,842Net earnings181,12241,194Earnings attributable tononcontrolling interests21,28110,230Net earnings attributable to Nucor stockholders$     159,841$       30,964Net earnings per share:  Basic$0.50$0.10  Diluted$0.50$0.10Average shares outstanding:  Basic316,595315,461  Diluted316,874316,228CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) April 2, 2011Dec. 31, 2010 ASSETS Current assets: Cash and cash equivalents $   1,152,944$   1,325,406 Short-term investments 1,143,0731,153,623 Accounts receivable, net 1,704,7891,439,828 Inventories, net 1,959,1701,557,574 Other current assets 335,634384,744 Total current assets 6,295,6105,861,175 Property, plant and equipment, net 3,831,6133,852,118 Restricted cash 576,546598,482 Goodwill 1,847,9941,836,294 Other intangible assets, net 844,994856,125 Other assets 947,689917,716 Total assets $ 14,344,446$ 13,921,910 LIABILITIES Current liabilities: Short-term debt $        16,965$        13,328 Accounts payable 1,114,256896,703 Federal income taxes payable 24,489- Salaries, wages and related accruals 222,085207,168 Accrued expenses and other current liabilities 409,831387,239 Total current liabilities 1,787,6261,504,438 Long-term debt due after one year 4,280,2004,280,200 Deferred credits and other liabilities 823,029806,578 Total liabilities 6,890,8556,591,216 EQUITY Nucor stockholders' equity: Common stock 150,240150,181 Additional paid-in capital 1,723,0601,711,518 Retained earnings 6,840,5026,795,988 Accumulated other comprehensive income (loss), net of income taxes 44,319(27,776) Treasury stock (1,506,747)(1,509,841) Total Nucor stockholders' equity 7,251,3747,120,070 Noncontrolling interests 202,217210,624 Total equity 7,453,5917,330,694 Total liabilities and equity $ 14,344,446$ 13,921,910CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months (13 Weeks) EndedApril 2, 2011April 3, 2010Operating activities:Net earnings $     181,122$       41,194Adjustments:Depreciation127,229127,883Amortization17,43718,221Stock-based compensation9,50810,396Deferred income taxes4,3112,443Equity in losses of unconsolidated affiliates4,21018,377Changes in assets and liabilities (exclusive of acquisitions):Accounts receivable(259,773)(179,297)Inventories(397,537)(303,001)Accounts payable216,308232,877Federal income taxes76,06017,566Salaries, wages and related accruals17,42135,747Other51,199(25,443)Cash provided by (used in) operating activities47,495(3,037)Investing activities:Capital expenditures(96,036)(54,216)Investment in and advances to affiliates(24,475)(80,461)Repayment of advances to affiliates-48,884Disposition of plant and equipment3,9853,046Acquisitions (net of cash acquired)-(55,694)Purchases of investments(140,454)(240,495)Proceeds from the sale of investments151,005125,000Changes in restricted cash21,949-Cash used in investing activities(84,026)(253,936)Financing activities:Net change in short-term debt (exclusive of acquisitions)3,5947,312Issuance of common stock2,6581,462Excess tax benefits from stock-based compensation(300)500Distributions to noncontrolling interests(29,694)(294)Cash dividends(115,233)(114,193)Cash used in financing activities (138,975)(105,213)Effect of exchange rate changes on cash3,0444,794Decrease in cash and cash equivalents(172,462)(357,392)Cash and cash equivalents - beginning of year1,325,4062,016,981Cash and cash equivalents - end of three months$  1,152,944$  1,659,589SOURCE Nucor CorporationFor further information: Nucor Executive Offices, +1-704-366-7000, or fax, +1-704-362-4208